- The European Court of Justice (ECJ) confirmed that Germany can split hotel services for VAT purposes, allowing ancillary services (like parking, breakfast, Wi-Fi, fitness, and wellness) to be taxed at the standard 19% rate, even if included in a single price.
- The reduced 7% VAT rate applies only to the rental of rooms for short-term accommodation; other services must be separated and taxed at the regular rate.
- The ECJ ruled that this German practice does not violate EU law, granting member states discretion to apply reduced VAT rates only to specific aspects of a service.
- The decision resolves previous legal uncertainty and supports the German tax authority’s approach, though practical difficulties in splitting prices may remain.
Source: bakertilly.de
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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