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2017
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2018 HOTREC ANNUAL REPORT
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HOTREC constantly strives to develop services to its Members that achieve measurable results for the
benefit of the industry in Europe and on a broader scale to society. With this goal in mind, HOTREC
conducted numerous studies and activities and successfully reached a large number of policy
achievements in 2017/2018.
Influencing EU discussions to keep VAT low
and to tax online platforms
Taxation is a crucial aspect of the competitiveness of the hospitality sector on the world tourismmarket.
Over the last 12 months, HOTREC actively contributed to the EU discussions on the revision of the VAT
Directive and in the taxation of the digital economy.
New Commission proposal gives green light to continuous application of reduced
VAT rates in tourism
As the Commission announced its intention to amend the rules on the application of reduced VAT rates,
of which benefits the hospitality sector, HOTREC and its Members put forward strong arguments to keep
VAT rates for hospitality services low, given these rates importance for job creation and competitiveness
on the global market. For instance, HOTREC actively contributed to the Commission’s preparatory work
with the publication of a report showing benefits of a low VAT rate application on job creation and
competitiveness in the European hospitality sector.
This helped paving the way for the Commission to propose in January 2018 an amendment of the VAT
Directive which allows for more flexibility for EU Member States to apply reduced rates of VAT, thus
allowing to keep such low rates for hospitality services in Europe. HOTREC is confident, that once the
new Directive will be adopted, Member States will keep the possibility to apply low VAT rates to tourism
services, therefore helping Europe remaining the N°1 tourism destination in the world.
Contributing to making a fair taxation of the digital economy a reality
In today’s digitalised economy, the tax returns deriving from large online platforms activities on
European ground do not live up to the value and revenues on transactions operated in the European
Union (e.g. AirBnB paid only 93.000 EUR on tax to the French treasury in 2016, while France is one of
its biggest markets in Europe). During the preparatory phase of the legislative proposal tackling this
issue, HOTREC reached-out to the European Commission clearly stressing that such loose tax regimes
are also hindering innovation and competition on the online platform market and thus contributing to
oligopolistic situations and preventing innovative start-ups to emerge. This advocacy work contributed
to the European Commission legislative proposals of March 2018, suggesting, that online platforms pay
taxes based on the value created in the country of operation.
Beyond the fair taxation of the activities of the platforms themselves, HOTREC continued its efforts
regarding the proper taxation of the underlying activities offered through collaborative economy
platforms.
CORE POLICY ACHIEVEMENTS
AND ACTIVITIES
HOTREC actively advocated for keeping low
VAT rates in order to foster job creation and
competitiveness, as well as for the taxation of
online platforms activities.