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Airbnb, the internet Local Lodging reservation platform, collected and delivered €2,600,000 in Municipal Tourist Tax during the first six months of the year, reaching a grand total of €8,100,000 raised on behalf of the Lisbon Council since the tax began in January of 2016. In 2017, the aggregate holiday let levy revenues came to €18,500,00 taken in by the country’s capital city.
Porto’s Municipal Tourist Tax only began to be applied in April 2018, but the results from the first three months of collection point to annual revenues 50% above initial estimates. By the end of the year, the municipality currently expects to raise over €9,000,000.
The growth of Airbnb in Lisbon can be seen through the tourist taxes delivered to the City Council. In 2017, the total value of this levy charged in Lisbon in local lodging accommodations available on Airbnb came to €3.8 million. The number of guests staying in the Airbnb platform jumped from 1.6 million to 2.6 million last year.
AMAL, the Algarve’s mayors’ group unanimously approved the introduction of a tourist tax for visitors staying in the region’s hotels and local lodging establishments. All municipalities in the region have committed to participating in the new charge. While the tax has yet to be set, it is expected that the final fee will follow the example of Lisbon where visitors pay €1 per night per person. Airbnb, the online reservation platform, helps to collect much of the tax and delivers millions of Euros to the city each year. Alternatively, the Algarve councils may follow the model of Oporto that has recently introduced a €2 per night per person levy. The region’s hoteliers’ association along with local lodging owners are expected to oppose the measure.
Each council plans to retain the money raised in their respective townships to be used “in favour of the development of the Algarve municipalities.” The stated purpose is to use the funds for “culture, combating seasonality and promoting the quality of the Algarve.”
The experience gained from Local Lodging over the years needs to be applied to the Tourist Tax concept. The shift from local statutes to national unity has lead to massive compliance, quadrupling the number of registered “AL” businesses over the past four years. Total registrations now surpass 60,000. Hopefully, the tourist tax concept will eventually embrace country-wide implementation rather than different rules and practices in each of Portugal’s 308 town councils. A comprehensive plan would eliminate local deviations which only create confusion and a sense of unfairness amongst visitors.
If a tourist tax were applied as occurs with “IMI” (Municipal Property Tax), where all municipalities reap the benefits proportionally, leaving tax collection from agents in the hands of the “AT” (Tax Authority), the outcome would increase local revenues while strengthening equity and harmony.
Airbnb announced that, since 01 May 2016, it has already delivered almost five million euros to the City de Lisbon from the collection of levies on holidaymakers. To date in 2017, the amount collected has been €3,100,000. Airbnb is the only internet hosting platform to collect the Tourist Tax (one euro per night per person) on behalf of the Lisbon City Council.
Based on the number of overnight stays last year (6.8 million) to be charged at 2 euros per night per person, the total anticipated revenue for the municipality is expected to reach 13 million euros. The city is preparing the process of applying the new tourist tax and anticipates implementing the new levy in January next year.
Cascais began charging a Tourist Tax of €1.00 per night as of 01 February 2017. The City Council estimates a minimum first year income of €1.2 million. Initially the proposed charge was to be €1.50, but the final levy was set at €1.00 per night, up to a maximum of five nights.
Lisbon, the city that pioneered the levy in Portugal, charges 1 euro on each night in the capital. The assessment brought more than 11 million euros to Lisbon in just 10 months. Vila Real de Santo António and Cascais are set to follow the example in 2017. Porto also contemplates launching a Tourist Tax but only as of 2018. Aveiro attempted to implement the measure in 2013, but a year later, suspended the fee.
The Municipality of Cascais will begin charging a tourist tax as of February 1st. All overnight stays in hotels, hostels and local lodging establishments will be subject to the charge of one euro per night, up to a maximum of five euros per stay.
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.