Mittelberg is a municipality in the district of Bregenz in the Austrian state of Vorarlberg .

The town lies in the Kleinwalsertal , a valley that is accessible by road only from Germany . Although it is not an exclave in a strict sense (it is contiguous with the rest of Austria), its geographic position creates a special situation. For instance, it has both Austrian and German postal codes . Since 1891 Kleinwalsertal has been in the German customs union, and has an open border with that country; before the introduction of the euro the Deutsche Mark was used there. Since Austria joined the European Union (1995), the Schengen Agreement was ratified (1997), and the Euroeuro was introduced (2002), this special status no longer applies. However, due to its location several taxation differences apply, such as a lower VAT rate.