Skatteudvalget 2023-24
SAU Alm.del Bilag 54
Offentligt
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VAT in digital age – deemed supplier
regime
eu travel tech
13 November 2023
 SAU, Alm.del - 2023-24 - Bilag 54: Baggrundsmateriale til Skatteudvalgets udvalgsrejse til Bruxelles den 12. og 13. november 2023
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eu travel tech, the voice
of the industry
FULL MEMBERS
ASSOCIATE MEMBERS
STRATEGIC PARTNER
 SAU, Alm.del - 2023-24 - Bilag 54: Baggrundsmateriale til Skatteudvalgets udvalgsrejse til Bruxelles den 12. og 13. november 2023
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ViDA Study – Flawed and Incomplete
The study associated with ViDA is incomplete and not based on full and accurate data.
It even contradicts other analyses by the Commission. An example:
800
700
600
500
400
300
200
100
0
Sources:
1.
2.
VAT in the digital age, Final Report - The VAT treatment of the digital
economy, Figure 7, p. 38
STR Regulation Impact Assessment SWD(2022) 350 final, p. 168
NUMBER OF ACTIVE STR PLATFORMS IN THE EU
710
Number of active STR platforms in the EU
62
According to ViDA
Study
According to STR
Regulation Study
 SAU, Alm.del - 2023-24 - Bilag 54: Baggrundsmateriale til Skatteudvalgets udvalgsrejse til Bruxelles den 12. og 13. november 2023
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STRs are not Hotels
A fundamental assumption in the ViDA proposals is that short-term accommodation rentals are similar to hotels and even
operate in the market. According to consumer survey data, this is false:
83% agreed that
73% agreed that
72%* agreed that
“I would not have
picked a vacation
rental if it was
available in the same
location”
63%* agreed that
60% agreed that
“I already know what
type of
accommodation I’m
looking for before I
start searching
accommodation to
book”
“Hotels and
vacation
properties offer
guests different
types of
experiences”
“
Hotels and vacation
rentals are not
interchangeable –
each is better suited
for different trips”
“I would not have
picked a hotel if it
was available in
the same
location”
*of respondents who
stayed at a hotel for
their most recent trip
*of respondents who
stayed at a vacation rental for the most
recent trip
Source:
Survey was conducted by a 3rd party in October 2023; 2,000 respondents >18 yo, who reside in the EU and have travelled (and booked their own paid for accommodation) within the EU in the last 12months; respondents were asked about their general views of travel and specifically
about their most recent trip accommodation; 96% of the respondents travelled for Leisure/ holidays and stayed in hotels (56%)/ vacation rentals (whole property) (20%)/ B&B (9%)/ aparthotels (11%)
 SAU, Alm.del - 2023-24 - Bilag 54: Baggrundsmateriale til Skatteudvalgets udvalgsrejse til Bruxelles den 12. og 13. november 2023
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VAT neutrality principle ignored
Status quo – VAT registered providers
Deemed supplier regime
Collects and remits
VAT from invoice
paid by STR provider
STR provider
Collects and remits VAT
from guest. Receives
refund on VAT paid to
supplier
Pays for STR
service,
including VAT
Guest
Collects and remits
VAT from paid by STR
provider
Supplier
Status quo – VAT exempt providers
STR provider
VAT is collected and
remitted by platform.
VAT deduction is not
possible
Pays for STR
service,
including VAT
Guest
Supplier
Collects and remits
VAT from invoice
paid by STR provider
STR provider
Neither remits
nor deducts
VAT
Pays for STR
service,
excluding VAT
Guest
Supplier
 SAU, Alm.del - 2023-24 - Bilag 54: Baggrundsmateriale til Skatteudvalgets udvalgsrejse til Bruxelles den 12. og 13. november 2023
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Small providers caught between rock and hard place
Provider accepts
increased
consumer prices
Offer is no longer
competitive
against VAT
registered
providers
VAT-exempt
provider offers
STR via
platform
DSR obligates
platform to add
VAT to price (7%-
21%)
!
Additional VAT
cannot be
compensated or
recovered
Provider lowers
prices to remain
competitive
Provider’s
margin is
significantly
reduced or
eliminated
 SAU, Alm.del - 2023-24 - Bilag 54: Baggrundsmateriale til Skatteudvalgets udvalgsrejse til Bruxelles den 12. og 13. november 2023
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Consequences for national tax authorities
The ViDA study concedes that the deemed supplier regime would only lead to 0.3% additional VAT revenue, but would confront
national tax authorities with potentially (hundreds of) thousands homeowners who will VAT register and begin deducting VAT
Source: VAT in the digital age, Final Report - The VAT treatment of the digital economy, Table 33, p. 146
Source: VAT in the digital age, Final Report - The VAT treatment of the digital economy, Figure 40, p. 138
 SAU, Alm.del - 2023-24 - Bilag 54: Baggrundsmateriale til Skatteudvalgets udvalgsrejse til Bruxelles den 12. og 13. november 2023
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Channel neutrality harmed
Lack of Channel Neutrality under the Deemed Supplier Regime
Assuming a 100 DKK / night vacation rental in Denmark (25% VAT) advertised via different channels
Vacation rental distributed via
Offline (phone, office, repeat customer)
Very small online platform (VAT exempt)
Online platform
Meta-search platform or social media
Price/Night for guest
100 DKK / night
100 DKK / night
125 DKK / night
100 DKK / night
 SAU, Alm.del - 2023-24 - Bilag 54: Baggrundsmateriale til Skatteudvalgets udvalgsrejse til Bruxelles den 12. og 13. november 2023
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ViDA Deemed Supplier Regime - Conclusion
In its proposed form, the deemed supplier regime:
Harms small and private providers seeking to supplement their income
Raises prices across the tourism sector
Unfairly disadvantages services sold through platforms
Is incompatible with basic principle of VAT neutrality
 SAU, Alm.del - 2023-24 - Bilag 54: Baggrundsmateriale til Skatteudvalgets udvalgsrejse til Bruxelles den 12. og 13. november 2023
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Advocating jointly for a reconsideration of the deemed
supplier regime
 SAU, Alm.del - 2023-24 - Bilag 54: Baggrundsmateriale til Skatteudvalgets udvalgsrejse til Bruxelles den 12. og 13. november 2023
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Thank you!
Emmanuel Mounier
SECRETARY GENERAL
Avenue Marnix 17
B – 1000 Brussels
www.eutraveltech.eu
@eutraveltech
M +32 499 80 13 74
T +32 2 669 42 53
[email protected]