Avoiding accommodation taxes in German cities

When it comes to taxes governments can be particularly innovative. That’s not new. Several European countries up to the middle of the 19^th century had window taxes*. Russia had a tax on beards at the end of the 17^th century and Prussia a tax on wearing wigs in the early 18^th century.

Our modern governments, confronted with financial crisis and economic challenges, are no less creative. As a result, we now have an accommodation tax in Germany, colloquially called “Bettensteuer” (literally translated as “bed tax”).

Which means that hotel rooms have an additional tax on top of the sales tax/VAT. This additional tax is only active in a number of German cities and not Germany-wide and the implementation is different in each location too!

Business travelers do not have to pay

This tax only applies to private travelers, not to business travelers.

Saying that you are traveling on business, however, is not enough. Because we seem to love paper-work in Germany, bureaucracy is kicking in and you’ll need to prove the business purpose of your trip with appropriate documentation.

But what constitutes such appropriate documentation? This again, is not a straight-forward affair. It varies from city to city.

In some cities you just need to make sure you have the accommodation invoice issued in the name of your company. But in others an official form has to be completed and signed by your employer.

How to avoid paying

To help you through this administrative jungle and save some money on your accommodation costs check out the City Tax Germany website.

The website will tell you what kind of documentation is required for which city and provides you with template forms to “prove” that you really are traveling on business.

So with a little preparation before your next Germany trip save yourself some unexpected surcharges.

* paying taxes based on the number of windows in a building, e.g. France, Germany, England, The Netherlands

This article expresses the opinion and experience of the author and in no way constitutes legal, financial or tax advice, professional or otherwise. If you have legal, financial or tax concerns relating to this article you should seek professional advice on the matter.