Alerta en el turismo: Bruselas pone en peligro el IVA reducido

Brussels is facing backlash over its proposal to raise the reduced VAT rate for hotels and restaurants from 10% to the standard 21%. The European Commission's move aims to boost revenue and limit its redistributive effects, yet recent analyses from the Institute for Economic Studies and the Tax Foundation reveal that such a hike could backfire on economic activity, employment, and real tax collection.

Tourism plays a pivotal role in Spain's economy, generating more than €200 billion in 2024, accounting for 12.6% of the country's GDP, and employing 2.77 million people (12.3% of total employment). It also constitutes the largest export of services, with a positive balance on the country's balance of payments exceeding €68.4 billion in 2024.

Any regulatory change affecting a sector of this magnitude must consider not only its direct fiscal impact, but also its ripple effects on the broader productive fabric. In economic terms, tourism functions akin to a service export consumed domestically. Unlike traditional goods exports, which benefit from zero taxation upon crossing borders, tourism cannot avail itself of this mechanism as consumption occurs locally.

Supporters of maintaining the reduced rate argue that the 10% compensates for the asymmetry caused by not being taxed upon entry, avoiding an undue fiscal burden on one of Spain's primary sources of foreign income. Conversely, fiscal harmonization advocates claim that indirect taxes should be simplified and reduced to expand the tax base and minimize consumption distortions.

The EU's revenue justification, estimating additional earnings of around 0.4% of GDP (€7 billion annually), is based on a model that, according to various economists, tends to underestimate consumer price sensitivity. Several academic and sectoral studies place the price elasticity of international tourist demand for Spain at around -1.9, indicating a notable sensitivity to price increases. This is compounded by a positive cross-price elasticity with competing destinations (Greece, Italy, Portugal, or Turkey).

Partial equilibrium simulations from the IEE and Tax Foundation suggest that a drastic tax hike could significantly shrink the tax base for tourism spending, neutralizing or even reversing the anticipated revenue gains, and shifting market share to international competitors. Another technical point of contention lies in the absorption capacity of businesses, with net margins in restaurants typically ranging from 3% to 10%.

Analysts warn that an eleven-point tax increase is unlikely to be absorbed without viability concerns, particularly for the sector dominated by SMEs and freelancers.

The tax transition's potential impact on consumer demand could translate into a contraction in activity, with downstream effects on employment—an area heavily reliant on labor—and indirect repercussions on tax revenues from social contributions and income tax, as well as increased unemployment benefits. The debate on the tourism VAT rate reflects the intricate balance between public finance sustainability and the preservation of foreign competitiveness.

While EU institutions stress the need to eliminate distortions and broaden tax bases through general rates, affected sectors and various economic analyses caution against underestimating the indirect costs of abrupt tax hikes on competitiveness. International evidence, such as Portugal's 2012 experience of raising the restaurant VAT from 13% to 23% and subsequently reversing the measure due to revenue losses and employment declines, is frequently cited to illustrate the risks of abrupt indirect tax increases in this sector.

Conversely, economies like Germany have opted for a permanent reduced rate of 7% for restaurant services to mitigate rising operating costs.