Important VAT decisions by the State Council on “no-shows” in the hotel industry.

• The Council of State made important decisions regarding the VAT regime for “no-shows” in the hotel industry
• Amounts retained for clients who do not show up are subject to VAT if they did not cancel their reservation on time
• The Council of State determined that amounts received for no-shows are part of a contracted accommodation service and must be taxed
• However, amounts retained for cancellations with a deposit are not subject to VAT as they are considered a compensatory amount without a service counterpart
• Hotels need to carefully define the nature of amounts retained for cancellations or no-shows to avoid incorrect VAT charges
• It is recommended to review contracts to clarify and distinguish between different types of payments and secure associated VAT treatments.

Source: ayming.fr

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.

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