- In Germany, short-term accommodation benefits from a reduced VAT rate of 7%, but questions have arisen over whether ancillary services – such as breakfast, parking, Wi-Fi, or wellness facilities – must be taxed separately.
- The ECJ was asked to clarify whether ancillary services (like breakfast, parking, Wi-Fi, wellness facilities) provided with German accommodation should be taxed separately or follow the reduced 7% VAT rate for accommodation.
- The Advocate General’s Opinion states that free ancillary services (e.g., free Wi-Fi, parking, wellness) are not taxable, so the VAT rate question does not arise for them.
- For paid ancillary services (such as breakfast included in the price), the Opinion addresses whether these should be taxed at the reduced rate or standard rate.
- The German Federal Fiscal Court believes the current domestic rule allowing selective application of the reduced rate is compatible with EU law, as long as it does not distort competition.
- The ECJ’s final decision will clarify the VAT treatment of ancillary services in German accommodation.
Source: taxand.com
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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