- The Council of State made important decisions regarding the VAT regime for “no-shows” in the hotel industry
- Amounts retained for clients who do not show up are subject to VAT if they did not cancel their reservation on time
- The Council of State determined that amounts received for no-shows are part of a contracted accommodation service and must be taxed
- However, amounts retained for cancellations with a deposit are not subject to VAT as they are considered a compensatory amount without a service counterpart
- Hotels need to carefully define the nature of amounts retained for cancellations or no-shows to avoid incorrect VAT charges
- It is recommended to review contracts to clarify and distinguish between different types of payments and secure associated VAT treatments.
Source: ayming.fr
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.
