Big Push to get Accommodation Tax Lowered to 5%

The Croatian Hospitality Employers’ Association (UPUHH) is trying to convince the government to reduce Value Added Tax (VAT) on tourist accommodation from 13% to 5%, saying the move would do wonders for the economy…

Speaking at a press conference yesterday, board member Ivana Budin Arhanic said that the move would bring in more than 2 billion euros in new investment and open up thousands of new jobs in the hotel and construction industry. With VAT on accommodation in Greece, one of Croatia’s main competitors in the summer tourism market, at 6.5%, UPUHH is urging the government to make the change as early as 1 January next year to keep Croatia competitive.

UPUHH say that they have done their homework and a 5% VAT rate on accommodation would dramatically boost Croatia’s economy, leading to new investments and more jobs. The extra revenue created by the tax reduction of 8% would go towards investments. In other European countries, such as France and Spain, the VAT on accommodation is 10%, whilst Portugal (6%), Greece (6.5%) and Malta (7%) enjoy some of the lowest rates in Europe.