- The reduced VAT rate for accommodation services cannot be tied to possession of a classification certificate, unless it corresponds to specific aspects of hotel services.
- The Court of Justice of the European Union ruled on this issue in a case involving Bulgarian tax legislation.
- The Bulgarian tax authority denied a company the reduced VAT rate for accommodation services because its classification certificate was revoked.
- The Court of Justice clarified that the EU directive allows for a reduced VAT rate for accommodation provided by hotels and similar establishments.
- However, the directive does not provide a specific definition of “hotels and similar establishments.”
- The directive also excludes certain accommodation services from the VAT exemption for property rentals in the hotel sector or similar sectors.
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.