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German GOV reduces tax on accommodation from 19 to 7% from Jan 2010

German GOV reduces tax on accommodation from 19 to 7% from Jan 2010

Oct 26th, 2009, 07:33 AM
  #1  
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German GOV reduces tax on accommodation from 19 to 7% from Jan 2010

FANTASTIC! That most definitely will help to get our budget straight!
CONGRATS to the lobbyists - these guys in Berlin are dumb like a short bread.



"Germany reduces VAT for hotels
Monday, October 26, 2009
The new government of Germany will reduce VAT for overnight stays in hotels from 19 to 7% until from January 1, 2010, hotelier.com reported. It's a great success for the hotel associations of Europes largest country. In Germany, from beginning of the next year the rate for hotel guest rooms will be charged with 7% VAT. Actually, the VAT for hotels is 19%.

The higher tax rate will remain for restaurants despite of VAT reduces in nearly all other Western European countries from 5 to 10%. Now, all hotels could concentrate on renovations and expansion, the German hotel associations DEHOGA and IHA said. "

http://www.traveldailynews.com/pages...VAT-for-hotels

SV
spassvogel is offline  
Oct 26th, 2009, 07:59 AM
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What happens for people who have prepaid their hotel rooms?
WillTravel is offline  
Oct 26th, 2009, 08:07 AM
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So far this is a plan of the new government but not yet a law. Let's see.
quokka is online now  
Oct 26th, 2009, 09:07 AM
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Will
I would check that with the TA closer to the time of travel! If it becomes law it should cause a refund.

SV
spassvogel is offline  
Oct 26th, 2009, 09:17 AM
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This does not necessarily force the hotels to lower their prices. There is no law about netto prices. The hotel may pay those 7% of tax instead of 19% to the tax administration and keep the difference. What can clients do about that? Nothing. You book a brutto price which "contains value-added tax at the legally-applicable rate" (quote from terms and conditions on hrs.com) - eh, the legally-applicable VAT rate can change.
quokka is online now  
Oct 26th, 2009, 09:49 AM
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Rates are always calculated without VAT. (With keeping im mind to make the final price look nice.)
In order to keep the difference, a hotel must actively increase its rates. Doing nothing results in a lower rate. So let's see what they do.

With respect to prepaid hotel rooms, no refund is given. All that matters is the applicable tax rate, the day you pay for the room. It is not important, how high taxes are the day you actually use your room. (one of the basics of accounting) ;-)
logos999 is offline  
Oct 26th, 2009, 09:53 AM
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"results in a lower rate for the customer"
logos999 is offline  
Oct 26th, 2009, 10:08 AM
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I am with quokka on this. I don't expect rates to go down. Hotels will just keep the difference. And 'calculating' rates? LOL Their calculation only consists of finding out how much they can demand. That's it.

It's even worse for business travellers: They are going to pay the same but can only deduct 7% VAT from then on. My sympathy is quite limited, though.

IF this becomes the law.
Ingo is offline  
Oct 26th, 2009, 10:12 AM
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>Rates are always calculated without VAT.

Wrong. The published rates are always VAT inclusive, at least in Germany.
quokka is online now  
Oct 26th, 2009, 10:25 AM
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Rates are always calculated without VAT

True. VAT is a "durchlaufender Posten" and added after all cost calculations are finished. I know, I do have a UST id. . Go shop at Metro..
Published rates are always!! calculated without VAT between businesses.

Only if a rate is given to a consumer or if this is unclear, it will include VAT in Germany. First question of a businessman in that case: "And VAT is included?"
logos999 is offline  
Oct 26th, 2009, 10:28 AM
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You both obviously don't have a business . You think like a consumer.
It doesn't work like that. ;-)
logos999 is offline  
Oct 26th, 2009, 10:56 AM
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logos, it doesn't become true just because you repeat it. Trust a lawyer and a free-lancer.

That's all I am saying here.
Ingo is offline  
Oct 26th, 2009, 10:59 AM
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I am self-employed, by the way, I do have a business and I know how VAT works, thank you. If you book a room on a hotel booking website, however, this isn't "between businesses". We are discussing the customer point of view here. A customer does not see the rates the hotel calculates. You see the total price including VAT. If the VAT rate changes it is up to the hotel to adjust the total price - if the rate rises, they will do so for sure, but if the rate is less than before, sticking to the previous price is to their advantage.
quokka is online now  
Oct 26th, 2009, 11:03 AM
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Ingo, I can't trust you in that respect. I'm doing the calculations at least once a month. I know, how it's done.

I'd actually hire you in case of a problem with the law, but not as accountant.
logos999 is offline  
Oct 26th, 2009, 11:09 AM
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It's business people that frequent most hotels. And they influence the rates. If those hotels increase rates it shows maybe not to a consumer, but to those business travellers.

You cannot just hide the increase. See.
logos999 is offline  
Oct 26th, 2009, 02:50 PM
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Your misconception is that you equal business travelers with free-lance/ self-employed. But the major chunk comes from employees/ business travelers working for corporations. The companies' accountants will see the difference between gross and net, but give a fiddler's fart as long as it's within a set spending limit. So only the self-employed business traveler will actually notice (and care) that a hotel has increased its net rate to end up with the same price when VAT is added.
Cowboy1968 is offline  
Oct 26th, 2009, 11:08 PM
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>but give a fiddler's fart
That's the point. Of course the corporations accountants notice and care about the price. I will make it rather difficult to generally increase prices for those hotels. We will see.
logos999 is offline  
Oct 27th, 2009, 03:42 AM
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while Spain raises their IVA.
lincasanova is offline  
Oct 27th, 2009, 03:51 AM
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I am not a business but a traveler and the rates quoted on HRS are the rates that I pay, hence VAT must be included. Rates may not go down in the short run. I do not mind. It is not in my interest to see hotels struggle to make a living, so I do not begrudge them the benefit in tough times.

If hotels are profitable, then more hotels will survive and I will have more choices and perhaps lower prices in the long run. If the lower VAT is fully absorbed in lower prices and hotels are driven out of business any way, then Karl Marx was right after all. ;^)

Regards, Gary
Gary_Mc is offline  
Oct 27th, 2009, 10:25 AM
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Those big cooporations have a pool of possible mostly "chain" hotels and there's rather stiff competition between them. If everyone was to increase "pre vat" prices at the same time, they could get away with it, but some won't and business may shift towards those hotels. It should also be to the benefit of leisure travellers.
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