Companies in the travel sector have to deal with all kinds of taxes on a daily basis. These might be, for example, the various VAT rates, the VAT scheme for travel agencies ('Tour Operators Margin Scheme'), wage taxes and national insurance contributions, local levies and corporate income tax. We quite understand if you can no longer see the forest for the trees. That’s why our specialists are here to help you with tax advice in the field of travel, leisure & tourism.
VAT in hotels
VAT is usually an important point of attention for businesses in the travel sector. Hotels provide lodging, to which a VAT rate of 9% applies in the Netherlands. In principle, a higher rate of 21% applies to additional services, such as parking and dry cleaning. But when the additional services are subordinate to the provision of lodging, then the 9% VAT rate may still be applied.
There is another situation which hotels can potentially be faced with. It may so happen, for example, that guests fail to arrive, even though they have paid for their overnight stay (no-shows). A different situation arises in case of cancellation. Is there a difference in VAT treatment? The VAT specialists of Meijburg & Co’s travel, leisure & tourism market group are here to assist you on these types of issues.
VAT issues for tour operators
Tour operators may also face a range of different VAT issues. Special VAT rules apply to tour operators under the VAT scheme for travel agencies. The consequence of this is that there is no right to deduct VAT on the purchase of travel components. VAT of 21% is owed on the profit margin on travel within the EU.
In practice, it appears that not only tour operators, but also other companies, often fall under this scheme unintentionally. This is the case for businesses which offer services to their customers in their own names, which consist of travel elements (excursions, accommodation or transport).
Our professionals are glad to help you out in each of these cases. In order to do so, we have developed VAT quick scans especially for the travel sector. These quickly provide you as an entrepreneur with insight into the opportunities and risks involved in the area of VAT.
Wage tax and national insurance contributions in the travel, leisure & tourism sector
Not only in the area of VAT, but also in that of wage tax and national insurance contributions, there are a number of challenges for the travel sector. That is because such companies often have many employees, as a result of which various aspects of tax are involved. For example, employee provisions may have consequences for wage taxes and national insurance contributions. Examples of this might include meals during working hours, work clothing and staff discounts.
In addition, businesses in this sector often have students and trainees working for them. Under certain conditions, you can apply a reduction to the wage tax of these employees and if, for example, you hire in self-employed workers, it is very important that you implement the correct policy on wage tax and national insurance contributions. Our experts advise you gladly on this subject.
Local (municipal) levies and tourist tax
Does your company in the travel, leisure & tourism sector own real estate? Then the Dutch Tax and Customs Administration will also confront you with taxes on this real estate, such as real estate tax. We can support you on your assessment under the Valuation of Immovable Property Act (WOZ). We will lodge an objection if this is set too high.
There are also often differences in insight when it comes to tourist tax. This is generally a question of the base on which this is calculated. Do you have questions about tourist tax or municipal levies on encroachments in, on or above public land? Then please contact our specialists.
Corporate income tax in the travel sector
As a Dutch company, you pay corporate income tax on your taxable profit. Do you wish to invest in operating resources, for example, in order to improve energy efficiency or environmental friendliness? Then the Dutch Corporation Tax Act of 1969 provides a number of schemes offering concessions or additional deductions. If you have recently invested, or plan to do so in the short-term, then you may be able to make use of these advantageous tax rules.
Do you have plans to restructure your business in the travel sector? There are also tax facilities for doing this. We will be glad to discuss wit you the potential opportunities in this area.
Need tax advice on travel, leisure & tourism?
Do you need help with VAT rates in your hotel or with the application of the VAT scheme for travel agencies? Or do you desire tax advice on tourist tax? Our travel, leisure & tourism tax specialists are here to help you. Our vast knowledge and experience ensure that we can offer you expert assistance, so that you no longer have to worry about the taxes which apply to your business.