- The French Conseil d’État ruled that hotels can charge a fee (commonly known as a “no-show” fee) to customers who fail to cancel their reservations and do not show up, and these fees are subject to Value Added Tax (VAT).
- The court determined that the fees charged represent a direct counterpart to the accommodation service that the customer committed to pay for when making the reservation, regardless of whether the service was utilized.
- This decision follows European Court of Justice jurisprudence, affirming that any payment tied to a service rendered, even if not used, must be subjected to VAT, thereby rejecting the hotel’s appeal against the tax authority’s ruling.
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