VAT reduction - easy in Lodgit Desk hotel software

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VAT reduction - made easy in Lodgit Desk hotel software

News that effects our German customers: On 03.06.2020, the Federal Government approved a comprehensive economic stimulus package to combat the effects of the Corona crisis. This includes a temporary reduction in value added tax. From 1 July to 31 December 2020, the VAT rate is to be reduced from 19 percent to 16 percent and the reduced rate from 7 percent to 5 percent. In addition, there is also the Corona Tax Assistance Act specifically for the catering trade, after which the reduced tax rate is to apply to food (but not to beverages) from 1 July 2020 for a limited period until 30 June 2021.

The managing director of Lodgit Hotelsoftware GmbH, Dr. Dirk Bockelmann, says: "The whole hotel industry had to suffer financially due to the Corona-related cancellations of bookings in the last few months. It is to be welcomed that the reduction of the value added tax now has a small compensatory effect for the hoteliers".

With Lodgit Desk, owners of hotels and small guesthouses are well prepared for the change in VAT rates. When the VAT on accommodation services was reduced in 2010, various functions were already built into the hotel software to make these changes as easy as possible. Of course the VAT change will also be taken into account in the Lodgit online booking system.

Simple step-by-step instructions for creating and amending the new VAT rates

This simple guide (in German) shows which settings have to be made on 01.07.20 in the Lodgit Desk hotel software for the VAT reduction.

Things to consider for package deals e.g hotel breakfasts

Because drinks are not included in the VAT reduction, how should you deal with packages that include both food and drink? For example as part of breakfast? No objections are raised if the tax percentage for drinks is set at a flat rate of 30%(!) of the total sales price. Details of how to make this change are explained in the Lodgit user manual (German text).

A screenshot of the window of the function to change the VAT rate in Lodgit Desk.
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