• Provision of furnished accommodation: additional conditions to determine VAT regime

Provision of furnished accommodation: additional conditions for VAT exemption

04 August 2022

On 1 July 2022, the new VAT regulation on the provision of furnished accommodation entered into force.

This new regulation makes a distinction between hotels and motels, on the one hand, and establishments with a function similar to hotels and motels, on the other, and provides for some additional conditions in order to determine whether or not the provision of furnished accommodation is subject to 6% VAT.

Duration of the stay

The provision of furnished accommodation in hotels and motels is subject to VAT provided that the duration of the stay is less than three months. If the stay is three months or longer, the exemption applies.

For the sake of simplification, the administration accepts a calculation method "from the umpteenth day to the day before the umpteenth day, minus one day". If the stay is extended and the period of three months is exceeded, the exemption will apply from the moment the period of three months is exceeded.

           

Establishments with a similar function to hotels and motels

In order to determine whether establishments with a similar function to hotels and motels are subject to 6% VAT, two additional conditions must be met.

Stay less than three months

Here too the 'usual' duration of stay must be less than three months. The administration considers an establishment where paying guests are accommodated 'normally' for a period of three months if, on an annual basis, the turnover from paid stays of less than three months is more than 50% of the total annual turnover from paid stays.

Ancillary services

At least one of the 'related services' will have to be offered and effectively provided to the guests, i.e.,

  1. Ensuring physical reception
  2. Household linen provided for guests, or
  3. Daily provision of breakfast.

As regards the first criterion, it is not enough merely to welcome guests. There must also be assistance at the request of customers for at least a large part of the day. It must be physical (not telephone or digital) reception and assistance.

For the second criterion, it is sufficient that bed linen or bath linen (not kitchen linen) is provided for each guest. Furthermore, it is required that household linen be provided at the beginning of the stay. If the length of stay is longer than one week, the household linen must be changed at least once a week (or at least one package of household linen provided per week).

As regards the third criterion, it should be breakfast provided by the operator himself. However, it is also possible that the operator provides breakfast vouchers, whereby breakfast is provided by a third party, on the condition that it is provided in the name or on behalf of the operator.

Furthermore, it is no longer required that it should be a global price. It is possible to charge a supplement for related services. If the customer has the choice of purchasing a related service, this condition is only fulfilled when the customer explicitly opts for this service.

 

Entry into force

This regulation came into force on 1 July 2022 and applies to accomodations booked from 1 July 2022 onwards.

 

Contact

Do you have questions regarding these new measures? Our VAT experts are available for advice or assistance with VAT formalities.