The new tax on tourist stays in the Balearic Islands
This summer, after a 13-year absence, we are to seethe return to one of Spain’s main tourist destinations of the tax on tourist stays (referred to more commonly, although inappropriately, as the “eco-tax”), which is a major source of friction between the tourism industry and the regional government of the Balearic Islands. As from July 1 2016, stays at tourist establishments in the Islands will be subject to the Tax on Tourist Stays in the Balearic Islands.
As some may remember, this is not the first tax to be levied on tourist stays in the Balearic Islands. The new tax is a descendent of the Tax on Stays with Tourist Accommodation Businesses, regulated by Balearic Islands Law 7/2001 and which remained in force until it was repealed in October 2003.
As had happened with its 2001 predecessor, from the point at which an updated version of the Tax on Stays in the Balearic Islands was first mentioned in the electoral manifestos of certain political parties, there has been a great deal of dispute over the advisability of introducing a levy of this kind in an Autonomous Community such as the Balearic Islands which depends to such an extent on its tourism industry.
After the autonomous community elections of May 24, 2015, the political parties which support the current regional government signed a Governability Pact which envisaged, as a “step to be taken”, the creation of a new tax on tourism.
Having rejected the possibility of imposing a tax for which tourists would be charged upon entering Balearic Islands territory, at ports and airports, the new Government took another look at the old law 7/2001 and decided to bring out a new version of the Tax on Tourist Stays. The culmination of the “step taken” by the new Government was the approval by the Balearic Islands Parliament of Law 2/2016.
The new tax is to be levied on stays by individuals at any Balearic Islands tourist establishment, as from July 1, 2016.
Its amount ranges between 0.5 and 2 euros per day or part-day of the stay, depending on the type of tourism establishment concerned and its category.
A 50% reduction is envisaged for stays during the off-peak season (from November 1 through to April 30 of the following year), and there is also a 50% reduction applicable as from day nine in the case of stays at a single establishment lasting more than eight days. The Law also envisages a series of exemptions:
- stays by minors under the age of 16
- stays for reasons of forcé majeure
- stays for health reasons
- stays subsidized under social programs of any EU Member State (IMSERSO, etc.). Although the Law considers the individual staying in the Balearic Islands to be the taxpayer, it names the person or business which operates the tourist establishments in which the individual stays as surrogate taxpayers.
Therefore, even though the person by whom the taxable transaction is performed is the tourist (the individual who is staying in the Balearic Islands), it is the surrogate taxpayer, i.e. the operator of the tourist establishment, who must fulfill all formal and material obligations relating to the new tax.
It is therefore the operator of the tourist establishment who must self-assess the tax and pay it in to the Balearic Islands treasury. The surrogate taxpayer, on the other hand, is required to charge the tax to the tourist, and the tourist is under the obligation to pay it.
The Balearic Islands tax differs from the Tax on Tourist Stays in Cataluña (the only tax of similar characteristics currently in force in Spain), in that it offers the surrogate taxpayer two alternative methods for the calculation of the tax base: direct assessment and objective assessment.
The regime applicable, in principle —unless the surrogate taxpayer expressly waives the entitlement to apply it—is objective assessment, given its simplicity, Rather than being based on actual stays taking place, this regime uses a series of indicators, parameters and modules to determine the tax base to be self-assessed by each taxpayer.
Specifically, regard is had to the type and category of each establishment, the number of places it has, and the number of days throughout the year for which it remains open.
According to the Balearic Islands Government’s forecasts, it expects to collect between 60 and 70 million euros per year thanks to this new tax.
These revenues are ring-fenced by law for appropriation, in their entirety, to the Fund for the promotion of sustainable tourism, and the resources of this Fund are necessarily to be used in the funding of projects which serve the objectives expressly envisaged in Law 2/2016.
Garrigues’ Tax Department