Since the beginning of next year, all tourists who stay in hotels, motels, holiday villages, boarding houses, etc. will have to pay a lodging tax. What is the essence of the law? How will it work? All this you will find out from the article.

What is the essence of the law and how much it will cost?

According to Turizm Guncel, this law (Law No. 7338) is not new — the legal regulation of the lodging tax was adopted back in 2019. However, its implementation has been delayed all along: due to various reasons, the number of tourists in Turkey has been decreasing in recent years, and the government probably feared that such a tax would further discourage holidaymakers. However, this year the number of tourists has increased significantly, and the Ministry of Finance and the Tax Service have prepared a draft on how to apply the previously postponed lodging tax. 

According to the draft, VAT will not be included in the tax base for housing. According to the law, the lodging tax rate is 2%, but the President has the right to increase this rate up to one time and to decrease it by half. For example, for a service costing 5,000 lire in a full-board hotel, the lodging tax would be over 5,000 lira excluding VAT. In this case, the lodging tax will be the equivalent of 100 lira. VAT over 5,000 lira will also be charged. The cost is 400 lira. The total amount will be calculated by adding the rental and VAT and the total amount will be 5,500 lira.

Various income related to the offered accommodation services, such as the difference in maturity, price difference, foreign currency difference, interest, bonuses, and all types of benefits, services, and valuables provided under similar names, will also be included in the assessment. If the price is calculated in a foreign currency, the foreign currency will be converted into Turkish currency under the Central Bank’s foreign currency purchase rate in effect on the date of the taxable event. For example, the operator of a holiday village (A) sold five nights (B) in a single room from 10 to 15 July 2023 for €200 excluding VAT on 14 March 2023. In this case, the base will show the equivalent of €200 in Turkish Lira at the foreign currency purchase rate valid on July 15, 2023. 

Who will have to pay the tax?

The tax will apply to those tourists who want to stay in a hotel, motel, holiday village, guesthouse, apart-hotel, thermal facility, guesthouse, or mountain house, as well as in units such as tents, tent cars, caravans, motor homes, bungalows. 

All other services offered in the accommodation facility sold together with accommodation service are liable to a lodging tax. For example, meals, drinks, activities, entertainment services, and the use of swimming pools, sports, thermal, and other similar areas offered in an accommodation facility are taxable. In this context, all services that are sold as «packages» under the names bed and breakfast, half-board, full-board, all-inclusive, ultra-all-inclusive, etc. will be taxable. For example, even if the breakfast service included in the accommodation option «breakfast in the hostel» is listed separately on the accommodation bill or is billed separately for this service because it is sold together with the accommodation service, the service offered on-site will be subject to lodging tax. However, in the spa and pool areas of the thermal hotel, if the daily service is provided to those who are not staying in the hotel, this service will not be subject to lodging tax.

Who is not affected by the tax?

However, a wedding, circumcision, congress, and meetings will not be taxed. Circumcision, wedding, cocktail party, meeting, congresses, symposiums, and similar arrangement services provided in hotels, regardless of accommodation service, will not be imposed with tax. If these organizational services are provided including accommodation, if the types of the organizational services are indicated in the bill or a separate bill is issued for the service, no accommodation tax will be levied on these services. Only accommodation services will be taxed.

Source: Turizm Guncel 

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