Tourist tax: bill gives municipalities the right to increase

The Ministry of Interior has granted Municipalities the right to increase the tourist tax charged to visitors to the country. It was passed in the bill submitted to Parliament titled “Arrangements for land border stations, the strengthening of local government organizations and other provisions”. The bill includes private hosts who are now also eligible for the guest fee.

Key takeaways from Article 30 of the bill:

1. A tourist tax of 0.5% is imposed on the rental amount of a bed, rented room, apartment, space or place in an official campsite, as well as on the price of a bed at a hotel or tourist accommodation of any functional type, as well as on the amount of the rental for each category of short-term rentals, when the stay is less than six months.
2. The municipal council concerned, has the right to increase the tourist tax to 0.75% and may differentiate either by residential areas clearly defined within the decision or by types/categories of short-term rental accommodation.
   The above decision shall enter into force three (3) months after its publication.
3. The tourist tax is a revenue stream for the Local Municipalities and can be used to cover any expenditure at their discretion. The fee is charged to the guest, is entered on the official tax documents issued and is collected by the landlord, who must then pay it to the beneficiary municipality within the VAT payment deadline. For those who are not required to submit a VAT return, the tax must be declared by the last working day of the month following each calendar quarter.

This means that the tourist tax now also applies to private hosts. Article 30 of the Bill states the following:

Article 30 full version

Tourist tax, accommodation, shops and spas

1. On the rent paid for a bed, room, apartment, space or place in an official campsite, or on the price of a bed at a hotel or tourist accommodation of any functional type as mentioned in par 2 of Article 1 of Law No. 1. 4276/2014 (A’ 155), as well as on the rent of accommodation of any category of short-term rent, a visitor’s accommodation fee of zero point five per cent (0.5%) is levied when the stay lasts less than six months.
2. The visitor’s accommodation fee referred to in par. 1 constitutes revenue for the local authorities and may be used to pay any expenditure. The guest incurs the fee, which is entered on the tax documents issued, collected by the landlord and paid by the latter to the beneficiary municipality within the time limit for the refund of value added tax (VAT). For those not required to file a VAT return, the tax return must be submitted by the last working day of the month following each calendar quarter.
3. The municipal council concerned, has the right to increase the tourist tax to 0.75% and may differentiate either by residential areas clearly defined within the decision or by types/categories of short-term rental accommodation.
   The above decision shall enter into force three (3) months after its publication.
4. On the gross revenue of: (a) shops of any kind in which food, drinks, coffee, refreshments, dairy products and pastries are sold for consumption on the premises of the shop or in a package, provided they have tables or seating facilities; (b) corner shops and bars, regardless of their name and category; (c) canteens, (d) nightclubs, dance halls and other establishments offering drinks and entertainment, cafes, entertainment centres and dance halls with music; and (e) casino businesses and the businesses operating within them, a fee shall be levied in favour of the municipalities in whose region the system of objective determination of the value of property is in force.
   The fee shall be calculated at a rate of zero point five percent (0.5%) for the following establishment categories a), b) and c), at a rate of five per cent (5%) for those in category (d) and at a rate of two percent (2%) for the establishments in category e).
   At the discretion of the municipal council concerned, the tax on the gross income of the establisjments under categories a) to c) may be increased to a rate of zero point seventy-five percent (0.75%) and, in addition, may be differentiated either by residential areas clearly defined, or by the diferentiation of  categories.
   The above decision shall enter into force three (3) months after its publication.
   Entertainment centres and shops that are inline with the above and operate within hotel establishments, supermarkets or department stores of all types and categories are also subject to the new regulations.
5. In the municipalities and in the regional-divisions of municipalities, where the system of objective determination of the value of real estate is not applicable, the tax of par. 4 may be imposed at the discretion of the relevant municipal council.
6. The tax of par. 4 may be imposed at the discretion of the city council, at a rate of zero point five percent (0.5%), on the following categories: (a) folk art; (b) souvenirs and gifts; (c) rental of local recreational boats, jetskis, surfboards, items used on the beach, water sports and diving schools, (d) winter sports equipment, skiing and mountaineering equipment, winter sports training schools, (e) car, motorcycle, bicycle and light personal electric vehicle rental (EPHO) and EHPO providers for shared use, (f) tourist products and souvenirs of any kind. In the case of the supply of goods and services in the context of the exercise of multiple economic activities by the above mentioned categories, for the determination of the tax due in accordance with the above, the gross revenues, which are derived only from the retail sale of the goods and services falling within the scope of the present, as they result from the declaration of par. 4 of Article 6 of Law No. 1080/1980 (A’ 246) and the VAT statements.
7. The fee of par. 4 to 6 is incurred by the customer and shall be indicated separately in the issued data, it will be collected by the person issuing the invoice, who shall pay it, whether or not they are liable to pay VAT, by submitting a declaration to the AADC.
8. A fee of up to fifteen percent (15%) can be imposed  for the use of natural thermal springs, at the discretion of the municipal council. The decision of the City Council shall enter into force three (3) months after its publication. The fee will be incurred by the user of the service and shall be indicated separately in the issued data and collected by the person issuing the bill, who shall pay it to the municipality concerned.
9. In cases of non-submission of a declaration for the fees referred to in par. 1 to 8, a fine will be imposed on the liable party in accordance with Article 73 of the Decree of 24.9/10.10.1958 (A’ 171). In cases of late submission of the declaration or non-payment of the fees, instead of the interest for late payment of the Public Revenue Collection Code (Law 4978/2022, A’ 190), a surcharge of two percent (2%) of the fee due is imposed on the debtor for each month of delay, which may not exceed one hundred percent (100%) of the debt due at any time.
10. From the total amount of the revenue collected each month, a withholding rate of five percent (5%) is set and paid to ALE 1440103001 of the state budget, notwithstanding the provisions of article 98 of Law No. 4270/2014 (Α` 143). In addition, ten percent (10%) will be transferred to a special account held at the Deposits and Loans Fund (“Municipal Relief Account”), in order to be returned to economically weaker municipalities.