The transfer of the operation of the AL service to specialized companies is already a well-established practice in the sector, making it easier to manage the accommodation and its clients. To do this, the owner of the property assigns the operation of the AL to a certain company, at a fee.
But what impact does this transfer have on the VAT regime?
In 2019, the Tax Authority (AT) ruled that, for the transactions included in item 2.17 of List I annexed to the CIVA, it would be applicable a reduced rate of 6%.
In other words, both the invoices issued by the operating company to its clients and the invoices issued by the owner of the property to his company should be subject to VAT at the reduced rate of 6%.
This understanding has now been changed by the AT, in the Binding Information published in March 2025.
When asked to rule on the VAT rate to be applied to the amount received by the owner of the property as part of the rental activity carried out by a company hired for this purpose, the AT has now stated that only invoices issued by the rental company to clients benefit from the reduced rate of 6%, with the owner being obliged to pay VAT at the normal rate of 23% on the amount received.
According to this new interpretation, the transfer of the operating rights of the AL establishment to the operating company is an atypical provision of services, which goes far beyond the mere provision of AL services, so only the latter would benefit from the scope of section 2.17.
As such, the amount received by the owner in return for the transfer must be taxed at the standard rate of 23%, and does not benefit from any exemption or reduction in the rate.
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This change could have an impact on the VAT framework for these operations, requiring careful analysis of the contracts signed between the owner and the operating company.
