Breakfast services provided to hotel guests are not subject to the reduced tax rate of 7% for hotel stays, even when offered as part of a package. Background: The reduced VAT rate of 7% instead of 19% applies to the letting of living and sleeping rooms that a business provides for the short-term accommodation of guests. However, this does not apply to services that do not directly serve the letting itself, even if such services are covered by the consideration paid for the letting (the so-called "hotel tax" introduced on 01.01.2010). A hotel operator who offered exclusively "overnight stays with breakfast" disputed that the standard tax rate of 19% should apply to the breakfast services, arguing that these were pure package offers and that the breakfast services were therefore covered by the letting. The BFH ruled against the plaintiff (BFH judgment of 24.04.2013, XI R 3/11), holding that the breakfast services did not directly serve the letting. Furthermore, the legislator's intention to exclude breakfast services from the reduced rate had been expressly stated during the legislative process.
Frequently asked questions
Frequently asked questions
Which VAT rate applies to breakfast services for hotel guests?
Breakfast services provided to hotel guests are subject to the standard VAT rate of 19%. The reduced rate of 7% does not apply to breakfast, even if it is offered as part of a package together with the overnight stay.
Which hotel services are subject to the reduced VAT rate of 7%?
Since 1 January 2010, the reduced VAT rate of 7% applies to the rental of living and sleeping accommodation that an entrepreneur provides for the short-term lodging of guests. Services that do not directly serve the rental are excluded, even if they are covered by the overnight charge.
Does the reduced VAT rate apply to a 'bed and breakfast' package?
No. Even with a 'bed and breakfast' package, the breakfast portion must be taxed at 19%. The BFH ruled on 24.04.2013 (XI R 3/11) that breakfast services do not directly serve the accommodation and are therefore not subject to the reduced VAT rate.
How must hoteliers allocate the price for package offers?
Hoteliers must split the package price into an accommodation portion (7% VAT) and a breakfast portion (19% VAT). This allocation is required because the legislator has expressly excluded breakfast services from the reduced VAT rate.