Tuesday, 4 April 2017
NIGHTCLUBS PAY 10% VAT (AGAIN)
According to the text in the draft law on General State Budgets, which the Government has presented to Congress this very morning, one of the most important new tax developments is the return to the reduced rate of 10% VAT for the so-called "mixed services" like hotels, entertainment, nightclubs and party venues. Therefore, everything indicates to nightclubs and party venues can re-apply the reduced rate of 10% VAT.
This change in legislation could be applied by high season - Summer 2017 - since the Budget Law is expected to take effect from the end of June.
Policy change addresses requests made to both Ministry of Finance and Government by the Association SPAIN NIGHTLIFE. In this matter, SPAIN NIGHTLIFE has been advised at all times by the legal firm GARRIGUES.
President of SPAIN NIGHTLIFE, José Luis Benítez, who is also in charge of the Association "Ocio de Ibiza" has valued very positively this regulatory advance with these words:
"We have repeatedly demanded the Ministry of Finance apply to the Nightlife Sector the same tax rate which is applied to the rest of the hotel industry because it was unfair we were penalized for playing music and in this respect we felt discriminated. We therefore appreciate this agreement has been reached and we hope everything will go forward until its final approval. Many jobs were at stake this summer, depending on this tax cut, so it comes at a good time. Also, to be taxed at such a high tax rate, with no possibility to increase prices, was drowning the sector and was seriously damaging the competitiveness of our venues, which is worth remembering are a tourist attraction of 1st order."
As a sign of the importance which SPAIN NIGHTLIFE has always given in recent years to the VAT issue, it’s worth mentioning already in 2015 participated in the “International Nightlife Congress” held in Ibiza, where we talked about tax and nightlife. VAT was one of the main topics and, on the other hand, on the 16th and 17th of May, the same association has co-organized the 1st “National Nightlife Congress” in Seville (CNON) where one of the main themes of the presentations is focused on VAT, a role which will be represented by a person in charge of the Ministry of Finance.