Tourist Taxes On The Increase

By Global Tax Weekly

Ever booked a hotel room online and wondered why the “final” price is higher than the price quoted on the screen? Or gone to check out of your room only to find that your bill has mysteriously increased, even though you assiduously avoided the mini-bar, and definitely did not spirit away the bathrobe in your luggage? Well, there’s a word for it, and one with which readers of this column should be very familiar: tax.

It’s certainly no coincidence that tourism-based taxes have multiplied considerably since the financial crisis. And it is no coincidence either that such taxes have sprouted up in the eurozone’s most cash-strapped countries, and especially those with substantial tourism industries. Spain and Greece are two examples. And in Portugal, companies are starting to complain about the increasing prevalence of these “discreet taxes.”

An indication of how widespread tourist taxes have become was recently provided by home rental portal Airbnb, which is putting in place systems to pay accommodation taxes on behalf of its users in 700 locations around the world.

Tourism taxes come in various guises. An extra charge for a hotel or bed and breakfast stay is just one example. But if you’ve travelled abroad, chances are you won’t even have noticed all those stealthy extra charges added to the cost of getting about, eating and drinking, or visiting various attractions. Which is probably why governments and local authorities are so fond of them. After all, you’re hardly going to pack your bags and storm off home for being asked to pay a few euros or dollars to rent a villa in the Algarve, or a condo on the Gulf coast.

Such taxes, therefore, come across a little bit sneaky. However, there is another party here that I haven’t yet mentioned. And they just happen to be the businesses who must collect and remit these taxes on behalf of the authorities, and few people stop to think – not least in office – that this is often a time-consuming and expensive process, often carried out under the threat of administrative punishments. Just ask Airbnb!

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