Austria: VAT on roaming services used in Austria upheld (Supreme Administrative Court decision)

The Austrian Supreme Administrative Court (SAC) on February 25, 2026, held in Case Ro 2025/15/0002 that Austria may apply VAT on telecommunication roaming services that are used and enjoyed in Austria despite Austria being a signatory of the International Telecommunication Regulations (ITR).

Background

A UAE‑based mobile network operator provided telecom services to its customers resident in the UAE. When these customers traveled to Austria, they used Austrian mobile networks under roaming agreements. Austrian network operators gave the UAE operator access to their networks and charged roaming access fees plus Austrian VAT. The UAE operator, in turn, charged roaming fees to its UAE customers for the use of Austrian networks.

For the periods January to December 2017 and January to December 2018, the UAE operator requested a refund of the Austrian VAT invoiced by the Austrian operators under the nonresident taxpayer refund procedure. The Austrian tax office denied the refund and later assessed Austrian VAT on the roaming charges to the UAE customers, applying Austria’s “Telecommunications Order.” The Telecommunications Order allows Austria to treat certain telecom and broadcasting, which would normally be located outside the EU under the general rules, as taking place in Austria if the services are used or enjoyed in Austria. This mechanism is designed to prevent non‑taxation within the EU.

The Federal Finance Court partially upheld the tax office’s position and allowed an ordinary appeal to the SAC, mainly regarding whether the so‑called “Melbourne Agreement” limited Austria’s right to tax these roaming services.

Legal questions

The case concerned two core questions.

• Whether Austria can treat roaming services provided by a non‑EU mobile operator to non‑EU customers as taking place in Austria when those services are actually used and enjoyed in Austria. This point relates to the place of taxation rules and the Austrian implementation of Article 59a(1)(b) of the EU VAT Directive through the Telecommunications Order.
• Whether Article 6.1.3 of the ITR, often referred to as the “Melbourne Agreement,” restricts Austria’s ability to levy VAT on these roaming services and therefore renders the Telecommunications Order contrary to EU law or unconstitutional.

SAC decision

First question

The SAC aligned its analysis with the Court of Justice of the European Union (CJEU) decision in SK Telecom (C‑593/19). In that case, the CJEU held that roaming services provided by a non‑EU mobile operator to its non‑EU customers, when those customers temporarily use a network in an EU member state, are services whose actual use or enjoyment occurs in that member state. The member state where the network is used can therefore treat the services as taking place on its territory to avoid non‑taxation in the EU.

Based on this reasoning, the SAC confirmed that Austria can apply the Telecommunications Order to treat the roaming services as located in Austria when the customers use Austrian networks, even though the operator and the customers are established outside the EU.

Second question

The taxpayer argued that the International Telecommunication Regulations, adopted in Melbourne in 1988 under the International Telecommunication Union (ITU), constitute a binding international treaty for Austria and restrict the possibility to tax such services. Austria ratified the ITU Constitution and Convention and thereby accepted the binding nature of the ITR. Article 6.1.3 ITR provides that when a country levies a tax on charges for international telecommunication services, that tax should normally apply only to international services billed to customers in that country, unless specific arrangements address special circumstances.

According to the SAC, the ITR, including Article 6.1.3, regulate international telecommunication services primarily at the level of relationships between telecom operators. They cover inter‑operator charges such as routing fees, transit fees, and termination fees for international connections between networks in different countries. The ITR do not address the tax treatment of the relationships between a telecom operator and its end customers. On that basis, the SAC concluded that the roaming charges that the UAE operator billed to its customers do not fall within the scope of Article 6.1.3 ITR. The provision applies to charges exchanged between telecom operators for international connections, not to the end‑customer bills for roaming usage. Because Article 6.1.3 ITR does not govern the operator‑to‑customer relationship, it cannot restrict Austria’s right to tax roaming services under the Telecommunications Order.

KPMG observations

This decision confirms that Austria can apply VAT to roaming services when customers actually use Austrian networks, even when a non‑EU operator provides the services to non‑EU customers. Non‑EU mobile operators that enable their customers to roam on Austrian networks remain exposed to Austrian VAT obligations under the use‑and‑enjoyment principle.

The decision also clarifies that international telecom frameworks such as the ITR address technical and commercial arrangements between telecom operators and do not remove VAT obligations arising in the relationship between a provider and its end customers. Businesses cannot rely on the ITR to argue for a general exemption or non‑taxation of roaming fees charged to customers.

Non‑EU mobile operators that offer roaming in Austria thus need to verify whether they face Austrian VAT registration or reporting obligations and whether they can recover Austrian VAT charged by Austrian operators. As other EU tax authorities may also look at the decision on the non-applicability of the ITR to potentially introduce use and enjoyment rules for telecommunications services, telecommunication providers should thus closely monitor this.

For more information, contact a KPMG tax professional:

Philippe Stephanny | philippestephanny@kpmg.com

Chinedu Nwachukwu | chinedunwachukwu@kpmg.com