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HomeColumnsArticlesThe hotel VAT increase in Greece to 13% for 2015, the abolition of the reducted tax for the Greek islands – Interactive consequences

The hotel VAT increase in Greece to 13% for 2015, the abolition of the reducted tax for the Greek islands – Interactive consequences

Because since the contracts with the Tour Operators for next year’s Tourist season, from May to August 2014, have already been signed and their pamphlets have been issued with charges for accommodation costs based on the signed contracts, now they are called to absorb these extra costs.

The Hotel VAT increase to 13%, relentlessly demanded by our country’s lenders and willingly accepted by the Government, seems like a time bomb. And it is a “time bomb” for one reason only. Because since the contracts with the Tour Operators for next year’s Tourist season, from May to August 2014, have already been signed and their pamphlets have been issued with charges for accommodation costs based on the signed contracts, now they are called to absorb these extra costs.

And the chances are now strong that they are going to redirect a large number of reservations in countries with better inelastic costs.

It’s mainly the wrong timing that surprises and amazes. It shows ignorance of parameters, correlations and consequences.

It shows amateurism, regardless of the evaluation of the phenomenon from a political stance point of view, which is not necessary herein, but it is understandable.

Of course, at the same time they have decided to increase the reduced VAT rate for hotels in specific island destinations (Aegean), which has been in force for many years.

In a ferocious manner, the President of SETE who was furiously judgmental, the prominent Minister of Tourism of Hellas, and the General Secretary of the Hellenic Tourism Organization, immediately lashed out against the Government.

But what is the truth regarding these events? Besides the timing. Primarily, it is unheard of to impose Value Added Tax in Tourism. Tourism means provision of Services. The VAT, when first imposed in Hellas, had to do with industrial production, especially exports, and not with the provision of services. Therefore it has nothing to do with Tourism.

Secondly, the preferentially low VAT rate for island destinations, always created a disadvantage for the many inland destinations of Hellas.  The result is they suffer the consequences in their revenues.

Which simply means that they operate from a disadvantaged business starting point. Unfair and unconstitutional at the same time. So why are the “preachers” of Tourism, of the status quo, “crying”?

Since, additionally, they lack the sufficient “will” and “determination” to collide head-on with the Giant Tour Operators, who always impose the prices (increases or decreases) for all kinds of hotel accommodation in our Country?

They even declare the above cynically themselves during their visits to Hellas. The Hellenic Tourism, as we have always stressed in Conferences and in our articles, is ill. It’s almost incurable! A strong national policy is required. Not rhetoric void of practical content.

Because in the end, we are all exceptional “mourners” before the incongruous “appearance” that it presents today.

While there is still time, let the Mandarins consider that seriously. And let them “refute the doomsayers”, through a strategy, announced yesterday by the Minister of Tourism, for “absorbing the impact” created by the aforementioned increases.

Emmanuel A. Gyzis is Senior Management Firm’s Member at Emmanuel A. Gyzis & Associates LG.

Managing Partner - Emmanuel A. Gyzis & Associates Law Offices | + Posts

Emmanuel A. Gyzis is managing partner of Emmanuel A. Gyzis & Associates Law Offices.

He was born in Athens, Greece, 13 January 1947; admitted to Athens Bar Association 1974. Education: University of Athens, Law School (1972), London, (L.LM. 1980), specialized in Aviation Law and originally worked in the respective field on behalf of British Tour Operators and Charter companies. 

With longstanding journalistic and writing activity, his articles have been published in financial newspapers and magazines specialized in Aviation and Tourism. Author of pioneering monographs on the development issues of Olympic Airways (1989), he has published during a course of many years, a series of articles regarding its viability, its position in the international environment, as well as for other private airlines in general, while at the same time he participated in relevant International and Greek Conferences and Organizations. Successful and long-term engagement with issues regarding private airports / heliports, Low Cost Carriers (LCC), Aircraft Fractional Ownership, Ground handling matters. At his law firm “EMM. GYZIS AND ASSOCIATES”, together with a group of specialized associates he deals mainly with aviation law issues (cooperation with construction companies for commercial aircraft and leasing companies) and tourism law issues, specializing in mass tourism from/ to Greece and occasionally cooperating with Tour Operators. Since 1993, he has founded a number of Greek and foreign airline companies, on behalf of his clients, in accordance with the applicable legal status. He has participated in committees for the drafting of legislation regarding air transport, such as private airports, the Presidential Decree for private heliports and the Basic Legislation of the Aviation Code and he is the General Secretary of the Hellenic Aviation Society. For many years, he has been studying emerging markets, as a consultant for foreign companies, which plan to invest worldwide.

LANGUAGES: English.

MEMBER: Athens Bar Association, International Bar Association, European Society of International Law (ESIL), American Society of International Law (ASIL), British-Hellenic Chamber of Commerce, Greek-American Union, Hellenic Aviation Society.

PRACTICE AREAS: Aviation Law, Aerospace Law, Tourism and Transport Law, (European) Commercial and Company Law. Arbitration. Establishment and Operation of foreign companies in Greece. Project Finance. Free Movement of Capital. Privatization. Foreign/ Hotel Investments. Mergers and Acquisitions.

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