When it comes to VAT
The coalition agreement of May 2024 includes two VAT topics.
Both VAT topics relate to the abolition of the reduced VAT rate (9%) on certain services and products. The intended effective date is January 1, 2026.
Hotel / lodging
For hotel accommodation and other similar establishments, the reduced VAT rate (9%) applies. The coalition agreement mentions the intention to abolish the reduced VAT rate for these services. Based on these plans, 21% VAT will be due on a hotel stay, from 1 January 2026. A reason for this rate increase is not given.
The abolition of the reduced VAT rate applies to all types of accommodation, including accommodation via platforms such as Airbnb and other types of short stay accommodation.
An exception is made for campsites.
By abolishing the reduced rate on these services, it is expected to generate €1.2 billion in additional VAT revenue.
Cultural sector (theatres / museums)
For a visit to the theatre or a museum, the reduced VAT rate (9%) applies. The coalition agreement also mentions the intention to abolish the reduced VAT rate for this sector. As a result, 21% VAT will be due for admission to theatres and museums from 1 January 2026.
Previously (for a shorter period in 2011 – 2012) services in the cultural sector were brought under the standard VAT rate. This caused a lot of commotion at the time. Unfortunately, the subject is back on the agenda. No background is given for this change either.
On the basis of the very brief explanation, the standard VAT rate (21%) applies to services (e.g. access) and to the supply of 'cultural goods'.
An exception is made for cinemas and day recreation.
By abolishing the reduced rate on these services, it is expected to generate € 950 million in additional VAT revenue.
If you have any questions about this topic or if you would like to discuss the topic further, please do not hesitate to contact us at info@vatpartners.com
11-09-2024 - In 2025, the margin scheme will be changed, meaning that entrepreneurs will no longer be able to apply the scheme if the goods were purchased with the reduced VAT rate. As a result, when these goods are sold, the full compensation falls under the (usually) 21% rate.
Read more21-05-2024 - The discussion about whether a new building can be created for VAT purposes after a conversion or a major renovation is not new. This applies in particular to the question of how to determine whether there is actually a new building after a conversion (major) renovation. In this news item we provide an update on this still ongoing discussion.
Read more17-05-2024 - The Court of Justice has ruled that entrepreneurs are still entitled to a VAT refund from other Member States, even if certain deadlines are not met
Read more30-04-2024 - ECJ case C-60/23 - Opinion of Advocate General - possible simplification for card issuer for charging EV's
Read more