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7% VAT rate on hotel accommodation in Germany

From 1 January 2010

The German Parliament accepted the new Growth Acceleration Law on 18 December 2009, which includes a reduction of VAT on accommodation from 19% to 7% with effect from 1 January 2010.

Therefore, any supply in relation to short term accommodation is now subject to the reduced VAT rate. Short term means the provision of accommodation for up to six months in accordance with Art. 12, para. 2 no. 11 UStG.

However, any supplies not directly linked to accommodation services continue to be subject to 19%. This includes subsistence services, such as breakfast, other meals, or the supply of drinks from the mini bar.

Providers of accommodation services are now required to itemize the supply of accommodation and the supply of subsistence or other services on their invoices, as these items are now subject to different VAT rates, unless the total bill is less than EUR 150.


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