What is VAT on hotel stays abroad?
VAT on hotel stays abroad is the sales tax that a hotel in another EU country charges on the room rate, and often also on breakfast and other services on the same invoice. For a Dutch entrepreneur, this is foreign VAT: you cannot deduct it in your Dutch VAT return, but you can request it back separately from the country where you stayed, under Directive 2008/9.
Hotel stays form one of the cost categories eligible for refund under this scheme, alongside for example fuel, tolls and trade fair costs. What makes the refund particularly significant for hotels is the amount per invoice: a few nights in a German, French or Italian hotel quickly results in more VAT than a tank of fuel, simply because the bill itself is higher.
Why a single trade fair week can already reach the annual threshold
Consider an example that occurs frequently in practice: a sales representative attends a trade fair abroad for a week and stays four or five nights in a mid-range hotel, including breakfast. Such an invoice easily contains several tens of euros in foreign VAT, and that is before the stand rental, transport and meals around the same fair.
Because each refund country applies its own annual threshold amount, this single week can be enough to exceed it. That is also why hotel stays are often the cost category that makes the difference between a request worth pursuing and one that just falls short. Those curious about how this works out for their own travel patterns receive a few questions about your business travel a first indication in euros.
What counts as a hotel stay, and what does not
The hotel stay cost category covers in essence the room rate and services directly linked to it that appear on the same invoice, such as breakfast, hotel parking or a tourist tax collected by the hotel on behalf of the municipality. Meals enjoyed separately from the stay, for example dinner at a restaurant elsewhere, fall under a different cost category and are also assessed differently.
Not every refund country treats these elements identically: one country allows VAT on breakfast to count within the hotel invoice, another takes a stricter view of what was exactly purchased. These differences by country are set out in the Requirements List published by the Tax Administration for each refund country, and are also why automated classification of invoices does more than simply reading the total amount.
What the invoice must look like
For refund purposes, the invoice issued by the hotel counts, with the hotel's VAT number, the amount excluding and including VAT, and the rate applied. A receipt without these details is insufficient for most countries; when there is uncertainty about what a specific refund country exactly requires, the Tax Administration's Requirements List is the source to fall back on, not a general assumption about what is customary elsewhere.
Because the invoice itself is the supporting document, it is worthwhile to have it sent to a fixed email address or uploaded at checkout, rather than waiting until after the trip. How this stream of invoices comes in and is processed is explained on the page about how the process works.
What this means for your annual overview
Because hotel costs often represent the largest single amount per invoice, for many entrepreneurs it is precisely this cost category that determines whether a request to a refund country is worth submitting. That is also why vatea.eu does not charge a subscription for the assessment itself: the fee is a percentage of what is actually granted, never upfront. How that success fee works exactly is set out on the page explaining how the refund process works.
Are you unsure whether a specific hotel invoice, or the trip it relates to, qualifies for a refund? You can get a free initial assessment with the calculator, and for broader questions about reclaiming foreign VAT there is the overview by situation.