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Tourism Sector Confused By VAT Increase

Tourists would buy a souvlaki with 23% VAT outside the hotel, but they would pay only 13% VAT for a meal in the hotel.
Additionally, this applies only to foreign tourists, as Greek would pay 23% VAT regardless if they are within or outside the hotel.
Tourist entrepreneurs speak of an unholy muddle in tourism taxation, while Ministry officials clarified on Monday that the all-inclusive packages sold abroad would be charged with 13% VAT.
It should be noted that the final price on all-inclusive packages are calculated based on three different rates of VAT: 6.5% for accommodation, 13% for food services and 23% for drinking.
SETE, the association of Greek enterprises is expected to submit proposals to the ministry for the “devastating” consequences of the VAT increase in tourism, while Yiannis Retsos, president of the Greek federation of hoteliers, said that the decrease of VAT to 6.5% had actual positive results. Revenue from tourism services recorded an increase of 12.5% in the first half of the year.
He added that the decrease of VAT on accommodation was favourable to the competitiveness of Greek tourism.
SETE, in collaboration with the Foundation for Economic and Industrial Research, is launching a survey on the effects of VAT increase.
However, FinMin Evangelos Venizelos said on Monday that the single tourism package would be under special care. VAT increase will not affect the taxation of all-inclusive packages, for the sales abroad.
(source: capital)

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