Last year, travel enthusiasts were shocked by the news: Greece is imposing a tourism tax. Of course, unnecessary spending is unpleasant for anyone, but this method of replenishing the state treasury is already quite widespread in the world. Thus, tourists pay the state for a comfortable stay in Spain, Italy, Serbia, Montenegro and even, starting in 2018, in some regions of Russia. The tourist tax in Greece was introduced on January 1, 2018 and the first travelers have already felt its effect. How the tax rate is formed, and on what principle the mechanism for paying the fee functions, we will tell you in today's material.
What is tourist tax in Greece
As you know, modern Hellas is going through hard times. The protracted crisis, in which the country has been for almost a decade, is forcing the government to amend laws and find new ways to generate income. And so, having studied the experience of neighboring countries, the Greeks also decided to levy a tax on the stay of travelers in the country.
Greece itself took the news about the resort tax with caution. Many predicted a strong drop in demand for holidays in Greece, and, consequently, a decrease in the country's competitiveness in the tourism sector. The autumn-winter period caused particular concern: Greek hoteliers even asked the government to charge an additional fee only during the holiday season. However, officials did not listen to representatives of the tourism industry, and the country is introducing a tourist tax on exactly January 1, 2018.
So, now what does a tourist need to know about the tax on residence in Greece? Firstly, that it is not paid to agencies, but directly to local hotels and inns. This means that Greece does not include the tourist tax in the cost of vouchers: the rate is paid separately from the cost of the entire stay. And, secondly, the amount of the tax payment is formed based on the number of days of stay and the quality of the services provided. Let's take a closer look at these rules for the formation of the Greek tax on housing.
Tourist tax in Greece - when and who should pay
All travelers who will reside in the country on legal terms are subject to payment of the fee, i.e. formalizing accommodation in hotels, guest houses, apartments and other types of housing. It does not matter whether the holiday season or winter is chosen for the trip: it is necessary to pay tax on accommodation not only in the summer months (as the Greek authorities stated earlier), but all year round. It also does not matter in which region of Greece the travelers will live. Athens, Crete, Rhodes, etc. - the tax rate is the same everywhere, and is adjusted only by the conditions of the room and the date of arrival.
Read also: Features of the geography of Greece
The tourist tax is payable at the check-in counter immediately upon arrival, i.e. even before placing in rooms, apartments or rooms. It is important to know that if a tourist refuses to pay partially or fully the amount of tax on accommodation, the hosting party (hotel / hotel / villa) has the right to refuse to provide services, even despite the reservation made for the number.
By the way, we note that this tax does not apply to booking accommodation at all: payment is made upon the fact of residence, i.e. from the moment of registration at the hotel until the official check-out. In other words, if you have made a reservation and due to the current circumstances are forced to cancel it, then, of course, you do not need to pay any taxes.
So, let's summarize and highlight the main provisions of the Greek law on tourism tax in 2018.
- The holiday season and the city of stay does not matter. Residence tax is valid throughout Greece all year round.
- All travelers staying in hotels, inns, villas, guest houses and other types of accommodation are required to pay the tourist tax.
- The tax is paid at the time of check-in.
- The amount of payment is calculated based on the rate for this room per one night stay.
- If the tourist refuses to pay the fee, the hotel has the right to refuse accommodation.
Of course, when going on a trip, you need to at least roughly imagine the amount of tax costs. The information presented in the next section will help you calculate the amount of additional room charges.
From January 1, 2018, tourists who stay in Greece for more than a day must pay a "residence tax". Now a night at the hotel will cost an additional 0.5 - 4 euros, and renting a room or apartment - from 0.25 to 1 euros
1Controversial tax
According to the government's calculations, the new tax will bring to the treasury about 80 million euros per year. This is just one of the measures taken by the Greek parliament in May 2016 to stabilize the country's economy. At the same time, it was decided to increase VAT from 23% to 24%, introduce a special tax on cigarettes, tobacco and electronic cigarettes. Together with a number of other important initiatives, the new policy has already yielded first results: according to IMF experts, Greek GDP growth in 2017 was 1.68%, and in 2018 it will reach 2.5%.
According to the government's calculations, the new tax will bring to the treasury about 80 million euros per year.
On the other hand, the new tax caused disapproval of the participants in the hotel market. Thus, the Hellenic Federation of Hoteliers (HFF) expressed concern that such a measure would not have the best effect on the development of the industry, and asked to limit its action to the summer period. "This will seriously affect any attempts to extend the tourist season, since, as you know, the cost of rooms in winter is much lower," - quotes from the HFF circulation GTP Headlines.
Hoteliers protest the new tax and predict a decrease in their profits by 435 million euros and losses to the Greek economy in 340 million euros
According to Grant Thornton analysts, the accommodation tax will negatively affect not only the hotel industry, but also the country's economy as a whole: hoteliers' profits will decrease by 435 million euros, and losses to the Greek economy will amount to about 340 million euros, which exceeds the potential profit in four times. According to the president of SETE Yiannis Retsos, the introduction of the levy will lead to an increase in the average cost of living by 5-6%, and for small hotels - by 10%, which will force their owners to bear the costs.
Photo: shutterstock.com 2 The rise of tourism
In 2017, a record number of foreign tourists visited Greece. According to preliminary estimates of the Greek National Tourism Organization (GNTO), announced at the WTM international exhibition in London, this number will be about 30 million: 7% more than in 2016. According to statistics published by the Athens airport, the passenger traffic of international tourists in 2017 increased by 12% compared to 2016.
In 2017, Greece was visited by about 30 million tourists.
According to the Bank of Greece, the amount of tourist spending from January to September 2017 broke a record of 13.02 billion euros, which is 1.24 billion euros more than in the same period in 2016. The average length of travel in these months increased by 1.5%, while the average cost per trip increased by 1.4%.
The indicators of the hotel business grew symmetrically. According to the Greek Statistical Office (Elstat), the number of nights that foreigners spent in hotels in Greece in the first three quarters of 2017 was 63.1 million, up 6.3% from 2016. Hotel occupancy also increased: from 54.1% in 2016 to 55.3% in 2017. In general, the turnover of the restaurant and hotel business in the third quarter of 2017 increased by 13.9% compared to the same period in 2016.
Photo: shutterstock.com 3 Why is the tax not scary?
“It is clear that Greece is heavily dependent on tourism and hospitality, but other cities in Europe are coping with this collection successfully,” says the British company The Hotel Property Team. For example, according to The Guardian, the tax on accommodation in Berlin, Amsterdam and Cologne is 5% of the room bill, in Paris - from 20 cents to 1.5 euros per person per night, and in Rome an additional charge for hotel accommodation can go up to 7 euros per night.
According to the calculations of the Greek tour operator Mouzenidis Travel, the new tax will increase the cost of Greek tours by an average of 40 euros. "Rather, we are talking about temporary inconveniences, since tourists in Greece are not used to paying a fee," - quotes a representative of the firm, the Association of Tour Operators of Russia. A number of five-star hotels have stated that they will not collect the tourist tax separately, but will charge it at their own expense.
According to preliminary estimates, the new tax will increase the cost of Greek tours by an average of 40 euros.
The additional tax is unlikely to seriously affect the number of tourists also because prices in Greece are significantly lower than in most other European countries. According to AirDNA, a service that processes Airbnb's data, the average rental price in Athens is one and a half times lower than in Berlin, two times lower than in Paris and Rome, and three times lower than in Amsterdam.
ATHENS, January 1 - RIA Novosti, Gennady Melnik. From January 1, 2018, a new tax for tourists is introduced in Greece - from 0.25 to 4 euros per night in a hotel, depending on its class.
The government hopes by means of a new collection of more than 80 million euros to increase the revenue side of the budget, in which tourism takes a significant share. However, hoteliers and tour operators believe that the new tax will hit the industry, lead to a decrease in demand, turnover and the loss of thousands of jobs.
In Greece, tourism accounts for about 20% of GDP, and the tourism industry employs 1.3 million people. This year, according to forecasts of the Ministry of Tourism, about 30 million tourists will visit Greece, each of whom left an average of 600 euros in the country.
"Residence tax"
The law that every tourist visiting Greece will pay extra for hotel accommodation was passed back in May 2016, but it was decided to introduce the tax from January 1, 2018.
"Accommodation tax" is charged daily from a tourist for the use of a hotel room, rented apartment, furnished apartment.
Guests of five-star hotels will be charged an additional 4 euros per night, four-star hotels - 3 euros, three-star hotels - 1.5 euros, and from hotels with one or two "stars" - 0.5 euros.
For renting one or two furnished rooms in an apartment or apartment, the fee will be 0.25 euros, for three rooms - 0.5 euros and for four-room apartments - 1 euros.
The levy was introduced along with a package of other tough measures to stabilize the Greek economy, which since 2009 found itself in a deep crisis. International creditors made the allocation of the next tranches of loans for the country a condition of the policy of "tightening the belts" and the adoption of tough austerity measures.
According to the calculations of the Ministry of Finance, the new tax was supposed to give the budget an additional 84 million euros.
However, hoteliers and tour operators disagree with this assessment. In their opinion, the very concept of such a tax is wrong, and in conditions of fierce competition in the tourism market, it can reduce the attractiveness of Greece.
"Wrong tax"
A study by Grant Thornton, commissioned by the Chamber of Greek Hoteliers, says the "accommodation tax" will be a major blow to the competitiveness of a Greek tourism product, both in terms of price, quality and employment. In the medium term, the damage to the Greek economy from its use and the decrease in tourist demand is estimated at 435 million euros, which is almost five times the potential financial benefit. As a result, the introduction of the new tax will lead to the loss of almost 6.2 thousand jobs,
Although the charge will not exceed € 4 per room per night, it will have an impact on the level of charges. In a global marketplace where price comparisons take place over the Internet, every euro counts, experts say.
"The tax itself is stupid. It is wrong initially. Four euros per day for a five-star hotel. Let's figure out what a five-star hotel means? There is a hotel that costs almost a thousand euros a day, and there is a hotel in Athens that can be rented for both 80 and 100 euros. It is strange that a tourist who pays a thousand euros per day will pay the same tax as a tourist who rented a room for 100 euros, "Dimitris Haritidis, Managing Director of TEZ TOUR Greece, told RIA Novosti ...
According to him, in some countries there is a tourist tax, which is immediately included in the room price, and the tourist does not see it, and there are no such problems. In Cyprus, such a fee is 1% of the cost of the tour, accommodation, it is included in the price, and the hotel then makes deductions to the state. There is such a collection in Italy and Spain.
"In Greece, the new tax will be paid by the tourist on the spot, at the check-out from the hotel," said Haritidis, adding that the tax will be taken for the room, and not for the person.
Haritidis emphasized that each tour operator is obliged to notify the tourist when buying a tour that its price does not include the tourist tax, and to name the amount. This is mandatory information, it should be in every contract, he added.
Haritidis also noted that so far the new collection has not influenced the growth of tour sales for the next year. "On the contrary, there is a tremendous increase in sales for early booking from Western countries and from Russia," - said the representative of the travel company.
"The entire tourism world tells the state that there will be damage, and the state responds - we see an increase in bookings, and so far we do not see any damage," he said.
Haritidis expressed the hope that the collection will still be canceled.
"The government said that this collection is temporary, it will be in the 2018-2019 season, and then it will be removed. Although I can't believe it," the expert noted.
For example, in Italy the size of the residence tax varies from 2-7 euros per day, in Spain from 0.45-2.25 euros, and in Montenegro - 1 euros per day. In Serbia, the residence tax is 50-140.00, depending on the category of the tourist destination.
Official answers from the Greek authorities to some questions:
Navigating the article
For which type of tourist accommodation is the residence tax charged?
Accommodation tax is introduced in hotels of 1-5 stars, as well as in other residential premises (apartments, rooms, detached villas) that receive guests on one or more days. In the camps, and in particular in certain categories, the accommodation tax is not paid.
How much is the residence tax? Housing or per person?
Residence tax is calculated as a fixed amount per day and per accommodation unit, such as a room, but not per person.
The amount of tax depends on the type of accommodation:
- 4 € per room per night for 5 star hotels
- 3 € per room per night for 4 star hotels
- 1.5 € per room per day for 3 star hotels
- 0.5 € per room per night for 1-2 star hotels
- 0.5 € per day for separate rooms, studios and apartments.
When is the residence tax payable? Will I receive confirmation that I have paid for this?
The sojourn tax is payable upon departure - immediately before departure. The owner or manager of the accommodation or hotel will give you a receipt, which includes: date of issue, name of the person to whom the accommodation was issued, dates of stay, amount of commission.
If we are vacationing with another family and staying in the same apartment, is it necessary for both families to pay the accommodation tax separately?
No. The fee is paid per accommodation unit per day, regardless of the number of people.
In agreement with the owner of the hotel or hotel, I plan to leave the room later (late check-out). Will there be an additional charge for my stay?
No. If the stay is extended by several hours, this does not count as an additional stay and does not imply an obligation to pay a fee. However, if the length of stay is such that it ultimately incurs an extra day of room use, then the accommodation tax will be charged.
The tax will be withheld from all travelers, both organized and independent, who stay in licensed accommodation facilities: hotels, guest houses, apartments and furnished rooms.
The most tax amount will be for those who stay in a 5 * hotel: they have to pay 4 euros per night. For guests of four-star hotels, an additional charge per night will cost 3 euros per room per night, for guests of three-star properties - 1.5 euros per night.
Those tourists who stay for rest in a four-room apartment or apartment will have to pay an additional 1 euro per night. For an overnight stay in hotels of 1 * and 2 * categories, tourists will be charged an additional 0.50 euros, the same will cost tourists and accommodation in a three-room apartment, and for living in one or two furnished rooms in an apartment or apartment, they will be charged 0.25 euros per night ...
Greek hoteliers and tour operators oppose the new tax, arguing that due to the increase in VAT to 24%, the Greek tourist product has risen in price this year. To support demand in the low season, there were proposals to levy a tax only in the summer months, so as not to undermine the competitiveness of Greek resorts. However, the Greek government has remained adamant so far: there will be and be tax regardless of the season.
The last attempt to influence the government was made by the Hellenic Federation of Hotels, on whose order they calculated how much Greece will earn on the new tax, and how much it will lose, taking into account the loss of other indirect income.
It turned out that tourism tax revenues a year will amount to 84 million euros, while due to a decrease in demand, Greece will lose from 340 million to 435 million euros in tourism revenues. The new tax is estimated to increase the average room rate by 1.9%, resulting in a 2.5% loss in room yield.
As the study emphasizes, if hotels take over the tax payment, they will either incur losses or be forced to reduce the quality of service. However, there have already been found hoteliers who have decided to pay the resort tax on their own so that new costs do not fall on the shoulders of the guests. This mainly concerns expensive 4-5 star hotels.
According to observers, the hotels made such a decision in order not to scare away their customers, but sooner or later they will have to include these expenses in their rates. At the same time, the rise in the price of services for end consumers will not be sharp, and in fact will not be noticeable.
If the tax is entirely shifted to the tourist's “pocket”, then there is a high probability that he will vote against him “with his feet” and simply go to another country instead of Greece.
It is also noted that the new tax levy will result in the loss of more than 6,000 jobs in the first year of operation.
The Greek Tourist Confederation (SETE) also agrees that the Greek hoteliers will have a difficult time. According to the president of SETE, Janis Retsos, Greece will not feel the consequences of introducing a kind of "resort tax" immediately, but in the "long term" - in 3-4 years.
“The tourism sector will not feel the full impact of the new tax in 2018, since many contracts for the next season have already been agreed. But in a few years, when Greece ceases to benefit from the geopolitical situation that has arisen due to the influx of tourists from Turkey and Egypt, there will be problems in Greek tourism, ”he said, noting that Greece is already considered an expensive place compared to its competitors.