Germany MOF Releases Decision Explaining Reduced VAT Rate for Hotel Spa, Restaurant Services

The German Ministry of Finance May 19 released Tax Court Decision No. XI B 2/21, explaining the application of the reduced VAT rate for spa and restaurant services provided by a hotel. The taxpayer, a hotel operator, offered spa and restaurant services in addition to the overnight accommodations provided by the hotel. The taxpayer charged her customers with a reduced VAT rate for the spa and breakfast services. The tax court explained that the taxpayer may apply the reduced rate on these additional services only if: 1) the services are directly attributable to the hotel accommodation provided; and 2) these ...