Taxation of Complementary Services in Tourist Rentals Explained by DGT

Understanding Tax Rules for Complementary Services in Tourist Rentals

The activity of leasing real estate for tourist purposes may consist simply in the provision of the property or may involve the provision of complementary services similar to those of the hotel industry. Likewise, it may happen that such complementary services are provided by the owners of the activity or that they hire specific personnel to carry out the tasks related to lodging.

The Directorate General of Taxes, in its recent binding consultation of July 17, 2024, V1778/2024, rules on the way in which each of these complementary services should be taxed, depending on the nature of the same.

First of all, it is established that the rental of tourist accommodation by a private individual is subject to but exempt from Value Added Tax; on the other hand, the exemption does not extend to the rental of a dwelling by a businessman or professional, so that in this case VAT is payable.

When complementary services are provided for the exclusive use of clients, such as hiking routes, guided tourist visits or the transport service to the destination, the income derived from the services provided is considered as income subject to Value Added Tax, taxed at 21%.

Secondly, if the leasing of real estate is complemented with the rendering of services typical of the hotel industry, such as restaurant, cleaning or laundry services, provided that such activity is carried out by a person employed under a full-time employment contract, such income will be taxed by the Personal Income Tax according to Article 27.1 of Law 35/2006, in the form of Income from Economic Activities.