Clarifying the accommodation tax

As a resident I am sometimes able to get 15% discount from hotels and restaurants. Some restaurants do not give this 15%. In one local hotel recently they would give it for breakfast but not for brunch. Can you let me know what exactly this 15% tax is and if the hospitality sector should legally give it off to residents or is it an optional discount?

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Auntie’s answer: I think there is a bit of confusion here. Many restaurants add an automatic gratuity to bills of 15% of the total. Not every eating establishment does this but for those that do, 15% seems to be the norm. (I will refrain from addressing the pros and cons of levying that service charge for fear of going way off topic.)

I believe that the “discount” you are referring to from hotels is actually the 13% accommodation tax that is charged to tourists who stay over. If a resident stays at a hotel they are not charged this extra fee, so perhaps it looks like a discount. But, either way, that reduction should only apply to the accommodation and not any restaurant bill or other service.

A Department of Tourism official helped to answer this question, pointing to the Tourist Accommodation (Taxation) Law (2013 Revision) (TAT Law) for clarification and noting, “the 13% Tourist Accommodation Tax collected under the TAT Law is in relation to the cost of accommodations to a ‘tourist’ and not services offered by the property”.

Section 2 of the law specifies that “accommodation” refers to an overnight stay in a tourist establishment and service connected to that, or a timeshare, but “service does not include the cost of food, drink and other consumables supplied to a tourist”.

As for the break in the bill that you were given, the tourism representative explained, “It appears that the person may have received a discount in relation to services offered by a particular property. Tourist accommodations may offer discounts or charge additional fees; however, this would be separate and apart from the charging of Tourist Accommodation Tax in accordance with the TAT Law.”

Tags: Tourist accommodation tax

Category: Ask Auntie