Hotel and golf service packages must be taxed with different VAT rates

The way combinations of services in tourist and sports complexes are invoiced has been defined by the tax administration. The Directorate General of Taxes (DGT) has analyzed whether the joint contracting of different supplies constitutes a single service or if it must be broken down according to its specific nature.

What the DGT has resolved

The inquiry raised whether the offer of a package including accommodation, catering, and use of a golf course should be considered a single service provision or a complex event organization service. The DGT's criteria establish that these supplies are independent services, even when marketed jointly, whether directly to the end customer or through event and travel organizers.

As there is no single unit of service that aggregates them into one provision, each concept must be taxed autonomously following the Value Added Tax (IVA) rules applicable to each activity:

• Accommodation and catering: taxed at the reduced tax rate of 10%.
• Use of the golf course: taxed at the general tax rate of 21%.

What it means for you

For hotel and golf course operators marketing combined packages, this resolution implies the obligation to correctly break down the tax rates on their invoices. It is not possible to apply a single tax rate to the entire package based on the main service.

From the perspective of the end consumer, this means that the total cost of the package will be composed of a mix of tax rates, which requires total transparency in the description of the services provided to avoid errors in the tax settlement.

What should be done

Companies in the sector must ensure that their billing systems and contracts allow for the identification and separation of each service. It is necessary to verify that the breakdown of accommodation, food, and sports concepts is carried out in accordance with the VAT rates ratified by the DGT, avoiding the application of a single rate that could lead to an incorrect tax settlement.