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Berlin Waves Through "City Tax"

by Ulrika Lomas, Tax-News.com, Brussels

16 December 2013


Berlin's state parliament has waved through plans to introduce a so-called "city tax" on overnight stays in the German capital, from January 1, 2014.

Berlin intends to impose a 5 percent tax on the cost of overnight accommodation for all private stays, irrespective of whether or not the stay is in a hotel, youth hostel, or indeed on a campsite.

The charge will be imposed on a per night basis, up to a maximum period of 21 nights. Professionals staying overnight in the capital on a business trip will be exempt from the tax, however. The levy is expected to generate annual revenues of approximately EUR25m (USD34.4m).

Defending the measure earlier this year, Berlin's Finance Senator Ulrich Nußbaum underscored that the city of Berlin currently attracts millions of tourists every year from all over the world, emphasizing that tourism is growing rapidly. The overnight tax is designed to ensure that tourists visiting the city provide a small contribution to maintaining and improving Berlin's attractiveness, Nußbaum argued, making clear that the measure will benefit both those living in Berlin and visitors to the city.

Furthermore, Nußbaum pointed out that many other tourist destinations, both at home and abroad, levy similar fees, including notably Paris, Rome, and Barcelona. Experience in other cities shows that a moderate tax does not deter visitors, Nußbaum insisted. Finally, Nußbaum pledged to keep administration costs as low as possible, to avoid increasing the burden on businesses.

Firmly opposed to the plans, Hotel and Restaurant Association Dehoga Berlin has already announced its intention to submit a legal appeal challenging the city tax. Hotels and other accommodation providers in Berlin will be responsible for collecting the tax. More details will be provided shortly.

TAGS: individuals | Finance | tax | business | fees | tax rates | Germany | Professionals

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