- VAT on amounts retained by hotels for cancellations or no-shows is a crucial subject governed by judicial decisions and tax administration clarifications
- Deposits are considered non-taxable for VAT, while deposits are subject to VAT if they cover the entire service
- Some operators tried to avoid VAT on deposits by not providing reciprocity, leading to tax adjustments by European authorities
- CJEU judgments have ruled that amounts retained for services not consumed should be subject to VAT
- Tax administration had not updated its doctrine until 2022 to reflect these jurisprudential developments
Source: cyplom.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
