The 5 percent hotel room tax that the municipality of
Cologne plans to introduce by year-end will not be recoverable, as previously
reported by BTN due to erroneous
information provided to a travel taxation expert who then told it to BTN on Monday.
Volker Jorczyk, a consultant with PricewaterhouseCoopers'
travel taxation competence center in Düsseldorf, told BTN on Thursday that under the draft legislation, business
travelers will not be eligible to recover the "cultural tax" from
Cologne.
Cologne is labeling the tax as a cultural tax intended to
maintain the diversity and quality of the city's cultural activities. Tourism
sources in Germany confirmed to BTN
that Cologne has introduced the tax in part because the German federal
government lowered the value-added tax on hotel room rates from 19 percent to 7
percent at the beginning of this year. However, German travel managers'
association VDR and other trade bodies have campaigned against the VAT move,
noting that many hotels have not lowered their prices accordingly, effectively
increasing costs for corporate clients because they can reclaim less of what
they pay.
Tourism sources confirmed the cultural tax could be
introduced before the end of this year. It will add to a growing tax burden
from travelers to and from Germany. A departure tax from all German airports is
scheduled to take effect starting Jan. 1, 2011.