Reduced Hotel VAT Rate May Exclude Extras Like Breakfast, Parking, Wellness, Fitness, and WiFi

• The European Court of Justice ruled that member states may limit reduced VAT rates for hotel accommodation to specific aspects of the stay.
• Additional services like breakfast, parking, wellness, fitness, or wifi can be excluded from the reduced rate, even if included in a single total price.
• The ruling clarifies that lawmakers can be selective in applying reduced VAT rates, contrary to the usual VAT principle where ancillary services follow the main service.
• The case involved German hotels and the question of whether services bundled with accommodation must receive the reduced VAT rate.
• The Court confirmed that member states can apply the reduced rate only to accommodation, while other services may be taxed at the standard rate.

Source: vat-consult.be

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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