VAT will reach all short-term tourist rentals in 2028
The European Union has adopted Council Directive (EU) 2025/516 of 11 March 2025, which amends Directive 2006/112/CE on VAT. It is part of the legislative package "VAT in the Digital Age" (VIDA), one of the most ambitious tax reforms in the past decade, and structurally reshapes the indirect taxation of tourist rentals.
Until now, in Spain many tourist rentals were exempt from VAT if no hotel-type services were provided (breakfast, intermediate daily cleaning, reception, laundry, periodic change of bed and bath linen). That distinction will disappear for short-term rentals.
From 1 July 2028, rentals of up to 30 consecutive nights to the same person will be subject to VAT even when no hotel-type services are provided. This article explains the technical content of the reform, its calendar, the obligations to come and how we recommend preparing the fiscal structure from now.
Published in the Official Journal of the EU on 25 March 2025. Part of the VAT in the Digital Age (VIDA) package approved by the ECOFIN Council on 11 March 2025.
👉 Full text on EUR-Lex
👉 Official statement of the European Commission (Taxation and Customs Union)
The VIDA package: three pillars of reform
Directive (EU) 2025/516 is part of the VAT in the Digital Age (VIDA) package, which articulates three fundamental blocks of EU VAT reform:
- Digital Reporting Requirements (DRR) and e-invoicing: gradual obligation to report intra-Community transactions in near-real time through structured electronic invoicing.
- Platform economy: reform of the regime applicable to digital platforms intermediating in short-term tourist rentals and passenger road transport. This is where the change that most concerns VUT owners belongs.
- Expanded One-Stop-Shop (OSS): extension of the single VAT registration mechanism to more cross-border transactions.
The second block is the one that directly affects the tourist rental sector and is the subject of this analysis.
The current regime in Spain: the "hotel-type services" frontier
To understand the scope of the change it is useful to recall the regime in force. In Spain, Article 20.Uno.23 of the VAT Act (Law 37/1992, LIVA) establishes the VAT exemption for "rentals of buildings or parts thereof intended exclusively as dwellings".
That exemption, however, does not apply —and therefore the rental becomes subject to VAT at the reduced rate of 10%— when the so-called "services characteristic of the hotel industry" are provided, which administrative doctrine and case law have delimited as follows:
- Cleaning service inside the apartment during the stay (not only at check-in/check-out).
- Periodic change of bed and bath linen during the stay.
- Permanent reception and customer attention service.
- Other complementary services typical of the hotel sector (luggage storage, press, activity bookings, etc.).
Consequently, many owners of tourist dwellings today operate under the exemption: cleaning and key handover take place between stays and the above services are not offered. This allows them not to charge VAT to the guest and, in return, not to deduct VAT paid on supplies, platform commissions or furniture.
The new regime after Directive (EU) 2025/516
The reform amends Directive 2006/112/CE to introduce a new categorisation of accommodation rentals. The core rule is:
Accommodation rentals for stays of up to 30 consecutive nights to the same person will be considered "services with a function similar to the hotel sector" and, therefore, subject to VAT, regardless of whether or not additional hotel services are provided.
The implications are several and far-reaching:
- The criterion is objectified: it no longer matters which services are provided; what matters is the duration of the rental.
- The threshold is 30 consecutive nights to the same person: above that limit, the traditional regime continues to apply (exemption or taxation depending on whether hotel-type services are provided).
- The incentive disappears to design the offer "around" VAT: any typical tourist stay (one night to a month) becomes taxable.
- Symmetry with the hotel sector is achieved: the European legislator understands that a 5-day Airbnb fulfils the same economic function as a 5-day hotel and both should be taxed equally, in line with the principle of fiscal neutrality.
Applicable rate
The Directive does not impose a specific rate: it leaves the decision to each Member State. In Spain, hotel-sector accommodation services are taxed at the reduced 10% rate (Article 91.Uno.2.2 LIVA). By consistency with the principle of neutrality and symmetry with the hospitality sector, it is logical that the Spanish legislator applies the same 10% to short-term tourist rentals after transposition. But this must be expressly confirmed by the national rule, which has not yet been adopted.
The silent revolution: platforms as taxable persons (deemed supplier)
Perhaps the most disruptive novelty of the Directive is not the VAT taxation itself, but the deemed supplier rule applied to digital platforms.
The logic is as follows: when an owner rents their tourist dwelling through a digital platform (Airbnb, Booking, Vrbo, etc.) and does not provide the platform with a valid VAT identification number, the transaction is deemed to be split into two transactions for VAT purposes:
- The owner supplies the accommodation service to the platform (without VAT, treated as a B2B supply from a non-identified owner).
- The platform supplies the accommodation service to the end guest (charging the corresponding VAT).
In this way, the platform becomes the taxable person for VAT purposes: it charges the tax to the guest, collects it, declares it and remits it to the Treasury of the Member State where the property is located. This rule is exactly the same as the one already applied since 2021 to e-commerce of goods (IOSS regime for low-value shipments).
Whoever rents today without being registered as a self-employed professional will see, from 1 July 2028, that the platform automatically collects VAT from the guest and remits it to the AEAT. This means, on the one hand, that the guest pays more (price + VAT), reducing the owner's competitiveness. And on the other, that the tax authority receives unequivocal information of the transaction. Tax opacity in the sector ceases to be viable.
Calendar: key dates
Obligations coming: practical checklist
Once the Directive is transposed, owners of tourist dwellings who act directly as VAT taxable persons will have to comply with a package of obligations that many of them did not have before:
- Tax registration: filing of forms 036/037 as a self-employed professional, indicating the corresponding business activity codes (typically IAE 685 "extrahotel tourist accommodation").
- Invoicing: issuing a (simplified or full) invoice for each stay, identifying the guest beyond certain thresholds or upon request.
- Returns: quarterly Form 303 (or monthly for large enterprises or REDEME) and annual summary Form 390.
- Record books: book of invoices issued, book of invoices received, capital-goods book and, where applicable, book of intra-Community transactions.
- Deductible input VAT: positive counterpart — possibility of deducting VAT paid on supplies (electricity, water, gas, internet), repairs, furniture, platform commissions, accounting, legal advice, cleaning products, etc.
- Reports to the AEAT: digital platforms will report transactions to the tax authority; automatic cross-checks with your returns.
How to prepare from now: 2026-2028 strategy
There are two years to go, but smart preparation happens now. These are the levers to activate:
1. Review of property and operating structure
Individual, joint property, SL, civil partnership… Each vehicle has different implications in VAT, personal/corporate income tax, business activity tax, deductible-expenses module and asset liability. The new VAT regime may tip the balance towards one structure or another. Reviewing now allows reorganising without pressure.
2. Pricing and margin projection
If you rent today at €100 per night, from July 2028 you will charge €100 + VAT (probably €10). The key decision is: do you absorb it (keeping the final price and reducing your margin), do you pass it on in full to the guest (keeping your margin and raising the final price by 10%) or a mix? Each option has different competitive implications depending on your market niche.
3. Inventory of deductible input VAT
Identify what VAT you currently "lose" as an exempt owner and will be able to deduct: supplies, platform commissions, repairs, furniture, accounting, legal advice, cleaning products, equipment. The tax saving partially offsets the new burden.
4. Anticipated voluntary registration
In certain cases, especially when there are large pending investments (renovations, equipment), it may be worth waiving the exemption and registering voluntarily before 2028, offering minimum hotel-type services. This way you start to deduct input VAT immediately and arrive at the change of regime with the fiscal machinery already running.
5. Renegotiation with managers and platforms
Management agreements and platform agreements may require adaptations: VAT pass-through clauses, VAT identification, exchange of information, distribution of compliance costs.
Design your fiscal structure for 2028 in good time
SALAMA LEGAL SLP performs comprehensive diagnoses: property structure, VAT projection, optimisation of deductible input VAT, anticipated tax registration and contractual adaptation. We help you reach July 2028 with your fiscal machinery ready.
Conclusion: tourist rental enters its definitively professional phase
Tourist rental is no longer —nor can it any longer pretend to be— an informal or supplementary activity. Tourist licence, community authorisation, SES Hospedajes platform, Single Rental Registry, mandatory VAT… Each year a new layer of professionalisation is added that requires planning.
Directive (EU) 2025/516 takes the decisive step on the indirect tax side: from July 2028, every short-term tourist rental will be subject to VAT, with or without hotel services, and platforms will play an active role in collection. Preparation time is limited, but sufficient: two years to reorganise the structure, optimise deductible input VAT and reach the change without surprises.
Those who start now to professionalise their management will have a competitive advantage. Those who wait until the last moment will find that the sector no longer forgives improvisation.
FAQ
What changes with Directive (EU) 2025/516 in VAT for tourist rentals?
Council Directive (EU) 2025/516 of 11 March 2025 amends Directive 2006/112/CE on VAT within the VAT in the Digital Age (VIDA) package. For accommodation rentals of up to 30 consecutive nights to the same person, it eliminates the traditional distinction between rentals with hotel-type services (subject) and without (exempt). All will be considered services similar to the hotel sector and therefore subject to VAT.
When does mandatory VAT on tourist rentals come into force?
The key date is 1 July 2028. Member States have until 30 June 2028 to transpose the Directive into national law. Spain must therefore amend the VAT Act 37/1992 (LIVA) before that date. Effective application of the new regime will start on 1 July 2028.
What is the deemed supplier rule?
The Directive introduces the deemed supplier rule for digital platforms intermediating in short-term tourist rentals. When the owner is not VAT-identified or does not provide a valid VAT identification number, the platform itself (Airbnb, Booking, Vrbo, etc.) will act as taxable person and must charge, collect and remit VAT. This is a major novelty that forcibly professionalises the sector.
What obligations will I have as an owner of a tourist dwelling?
If you rent for stays of up to 30 consecutive nights and the Directive is already transposed, the main obligations will be: tax registration as a self-employed professional (form 036/037), invoicing, periodic VAT returns (quarterly form 303 and annual summary 390), keeping of record books of invoices issued and received, and application of the corresponding tax rate. Furthermore, greater exchange of information with the AEAT through digital platforms.
What VAT rate will apply to tourist rentals?
The Directive does not impose a specific rate; it leaves it to each Member State. In Spain, hotel services are taxed at the reduced 10% rate. By symmetry with the hotel sector, it is logical that the Spanish legislator applies the same reduced 10% rate to short-term tourist rentals. But this must be expressly confirmed by the transposing rule.
What happens if I rent for more than 30 consecutive nights?
Rentals for more than 30 consecutive nights to the same person fall outside the new regime of Directive (EU) 2025/516. For those cases the traditional regime continues to apply: in Spain, residential rentals without hotel services are VAT-exempt (Article 20.Uno.23 LIVA). Only if hotel-type services are provided do they lose the exemption and become taxable at 10%.
Should I act now or can I wait until 2028?
It is advisable to start preparing the fiscal structure from now, without waiting until 2028. Recommended actions in 2026-2027 are: review of the property structure (individual, company, joint property), projection of the VAT impact on the final price offered to the client and on margins, planning of deductible input VAT (supplies, repairs, furniture, platform commissions), renegotiation of agreements with managers and platforms and, where appropriate, opting for voluntary registration as a self-employed professional to deduct input VAT in advance.
Official sources and references
- Council Directive (EU) 2025/516 of 11 March 2025 — full text on EUR-Lex
- European Commission — Adoption of the VAT in the Digital Age package (11 March 2025)
- Spanish VAT Act 37/1992, of 28 December 1992 (LIVA)
- Council Directive 2006/112/CE (the VAT Directive), consolidated version on EUR-Lex