One of the ways in which local authorities generate revenue is through the tourist tax. But who is liable to pay it?
Tourist tax
Tourist tax is payable by persons offering temporary accommodation within the municipality. This may relate to the stay of genuine tourists in, for example, hotels or on campsites. However, it may also apply to the stays of so-called expats. These are foreign employees of (mostly) international companies who have been temporarily posted to work in the Netherlands.
The Advocate General (AG) at the Supreme Court recently ruled in an opinion that it was not the landlord of the flats, but the agent, who was liable for tourist tax. This concerned the City of Amsterdam, which sought to levy a tourist tax on the owner of a number of furnished flats that were let to companies. These companies made the flats available to their expatriate staff for a maximum of (approximately) six months at a time. The owner of the flats provides a number of additional services, such as cleaning and maintenance of the flats, as well as checking the expats in and out; the cost of these services is included in the rent. In addition, the owner invoices the expats monthly for costs not included in the rent, such as telephone charges, dry cleaning, laundry and similar expenses.
Court
The Court of Appeal ruled that the owner of the flats was liable for tourist tax. The main reason for this ruling was that the owner’s service involved more than simply making the flats available. This is not affected by the fact that the owner does not receive the payment from the users of the flats (the expats) but from their employer.
Opinion of the Advocate General
The Advocate General concludes that the Supreme Court has not yet developed a criterion for answering the above question, but that there is a great need for one, particularly in view of the emergence of all manner of online recruitment agencies. The Advocate General concludes that, in the present case, it is not the owner but the companies renting from him that are providing accommodation to their expatriate staff. The renting companies are therefore liable for tourist tax.
The Advocate General proposes that the Supreme Court formulate the following criterion:
A taxable person is anyone who, by virtue of their own authority (ownership, tenancy or otherwise):
– enters into an agreement with the accommodation provider that is (partly) focused on the accommodation;
– provides actual accommodation;
– is entitled to the payment due for the stay, to be paid by or on behalf of the accommodation provider.
Of course, the Supreme Court has the final say.