Greece’s Independent Authority for Public Revenue (AADE) recently issued a circular that includes clarifications on which properties rented for the short-term (Airbnb-type rentals) to individuals will be subject to value-added tax (VAT).
According to the circular, signed by AADE head, George Pitsilis, properties rented to individuals for the short-term, in the context of the sharing economy, are exempt from VAT provided that during the period of stay, the host (owner) does not provide additional services to guests similar to those offered in hotels, such as cleaning services, waste collection, changing linen and other customer care services.
The circular notes that the supply of bed linen is not considered an additional service and therefore has no effect on the VAT exemption. Also, other utilities such as electricity, water and Internet connection, which are charged to the host and subsequently passed on to the guest, are included in the value of the rental price and therefore are not considered additional services and do not affect the VAT exemption.
However, the circular makes it clear that during the short-term lease of a property, if a host provides additional customer care services that are equivalent to those provided in hotels, then the rental price is subject to VAT as it is considered to be a supply of residential services subject to the reduced VAT rate of 13 percent.
It is noted that derived income from short-term rentals will be taxed under the provisions of rental taxation for such properties. Parliament has already ratified a bill that imposed a 15-45 percent tax on annual income from renting property for tourism accommodation.
For quick guidelines for short-term rentals in Greece, press here.