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With wintertime coming, many property owners may want to take the easy road and accept long term rentals (more than 30 days) from tourists who wish to enjoy the Portuguese climate during the winter.
This is not Local Lodging but long term rental. A written contract has to be drawn up and registered with the TAX Office. Owners under the age of 65 have to issue monthly electronic receipts. All owners have to send a Summary to the Tax Office after the period has finished. In the tax declaration, this income will be declared under Category F, with a tax rate of 28%, In this case, certain costs can be deducted.
Airbnb has capitulated to lawmaker demands over its operations in New York City, agreeing to drop a legal challenge against newly passed legislation. The suit disputed a recent state law calling for fines up to $7,500 for illegally listing short-term offerings on online rental platforms such as Airbnb.
The Rates Supplement (AIMI) will be aggravated to 7.5% for properties registered in offshore companies. The measure is integrated with other changes to the State Budget for 2017. This alteration, together with other modifications to AIMI as well as lower than expected inflation, is intended to help pay for an extra €6 increase in basis pensions, as demanded by the coalition of left-wing parties.
by our correspondent Dennis Swing Greene
Since January 2016, visitors to the Portuguese capital have to pay a Municipal Tourist Tax of €1 per person per night. Children under 13 and those seeking medical treatment are exempt. The levy only applies to the first seven nights. Scattered municipalities, such as O Porto and Cascais, are also considering a Tourist Tax on a similar basis to Lisbon.
Based on information from the European Tour Operators Association (ETOA), we will look at what tourist taxes are charged at popular holiday destinations around Europe beyond Portugal.
Tourists an overnight accommodation tax (including in caravans and campsites), which is charged according to each province. Called Tourismusgesetz and Beherbergungsbeiträge, the tourist levy ranges from €0.15 to €2.18 per person per night. Children under 15 are exempt.
There are a range of tourism taxes varying by city. In Antwerp there is a fixed rate of €2.39 pp, per night for stays in hotels or €0.53 for campsites and camper van sites. Children under 12 are exempt. Bruges has a tourist tax of €2 pp, per night. In Ghent, the City Tax is €2.50 pp, per night. Brussels charges a City Tax per room, per year according to the borough, hotel size and hotel classification. For example, the levy is €7.50 per room, per night at the Brussels Novotel.
France has the ‘Taxe de Sejour’ which is charged per person, per night and varies according to the quality and standard of the accommodation. The rates range from €0.20 to €4 per person, per night. Children under 18 are exempt.
Kulturförderabgabe (Culture Tax) or Bettensteuer (Bed Tax) are charges in Germany. The taxes range from €0.25 to €5 per person, per night or 5% of the room bill depending on the type of accommodation, room rate and location. In Berlin, the charge is 5% of the room rate, capped at 21 successive days. However, business travellers are exempt from the tax.
Tourists pay a tax called “Tassa di soggiorno”. The charge varies from city to city, depending on a hotel’s rating, levied on a set number of nights. Children are usually exempt. In Rome, the tax ranges from €3 to €7 per person per day for up to 10 days. Children under 10 are exempt.
In Holland, the tourist accommodation tax is called “Toeristenbelasting”. It is charged in nearly all the 421 municipalities per person, per night, but can vary according to hotel classification and type of accommodation. For example, Amsterdam has is a 5% City Tax based on the room price.
Apart from the planned tourist tax for the Balearic Islands, Spain also charges visitors the “tasa turistica” in the Catalonia region. The levy is €0.45 and €2.25 pp, per night, for the first seven nights, depending on hotel category. Children under 16 are exempt. The tax is subject to VAT.
The tourist tax is charged per person, per night and varies by canton and, in some cases, by type of accommodation. It is made up of two elements the Beherbergungsabgabe (BA tax) and Kurtaxe. The BA tax goes towards paying for tourism advertising and maintaining infrastructure in regions. The Kurtaxe is used to improve the tourism experience for visitors. As each Canton in Switzerland determines how to set the taxes, there can be further variations. Generally, the tax is around 2.5CHF (€2.3) per person per night.
Dennis Swing Greene is chairman and International Tax Consultant for euroFINESCOs.a.
A research group of the University of Porto found that tax evasion in the country seems to be based on the perception that direct, indirect and Social Security contributions are too high on the citizens’ wallets and businesses. Taxpayers also bemoan the bureaucracy and its complexity of regulation. In general, authorities are not perceived to be credible.
It was reported that the “informal economy” – a sector in which citizens avoid issuing proper invoices – increased slightly last year to almost 28% of gross domestic product. Measures implemented to entice people to come clean for specific businesses, such as the introduction of VAT credits on official invoices and other incentives (car lotteries), have not improved the percentage to make the Authorities happy..
An added assessment, dubbed “Additional Municipal Property Tax” (AIMI), will cover the entire ratable value (VPT) with an exemption on the first €600,000. For properties above this evaluation, the rate of 0.3% will apply. Property Owners with outstanding taxes will forfeit this exemption and will have to pay the new levy whatever the VPT.
Apart from the increase in Tax on Local Lodging (from net 3,75% to net 8.75%) the State is planning indirect taxes and changes for 2017.
An added assessment, dubbed “Additional Municipal Property Tax (AIMI), will cover the entire ratable value (VPT) with an exemption on the first €600,000. For properties above this evaluation, the rate of 0.3% will apply. Property Owners with outstanding taxes will forfeit this exemption and will have to pay the new levy whatever the VPT.
On the other hand, owners of buildings with ratable values over one million euros should pay less overall tax in 2017 than last year, even with the proposed increase in Municipal Property Tax (IMI), due to the elimination of the 1% Stamp Duty on this type of luxury real estate.
In the 2017 Portuguese State Budget there will indeed be a change to the tax on Local Lodging. After heated discussions on Thursday evening, it seems that the Government is not going to increase the overall tax rate to 28%.
Instead, the taxable part of the income will increase from 15% to 35%. This means that the current tax rate of net 3.75% will go up to net 8,75% .
An example: A Local Lodging owner has an income of 100€.
Until 31.12.2016, a tax rate of 25% is applied to 15% of the 100€,
so 15€ are taxable. On this amount, the tax rate is 25%.
The result: of 100€ income: he pays 3.75€ to the state.
As of January 2017, a tax rate of 25% is applied to 35% of the 100€,
so 35€ are taxable. On this amount, the tax rate is 25%.
The result: of 100€ income: he pays 8.75€ to the state.