Feature: What changes in short-term leases according to the AADE's explanatory circular
With the introduction of the new law 5073/2023, the Greek short-term rental market was faced with changes that brought many ambiguities and the need for further clarifications. After several months of waiting, the AADE issued the explanatory circular, providing important information on the implementation of the law, with the aim of clarifying many points regarding registration and taxation procedures. Let's examine the most important points mentioned in the circular that affect short-term rentals and reservations outside digital platforms (direct bookings).
1. Short-Term Rental Registry
The most important and most decisive factor that is clarified is that all short-term rentals – regardless of whether they come from digital platforms (such as Airbnb, Booking.com, etc.) or outside of them (e.g. direct bookings via website, phone or email) – must be registered in the official short-term rental register of the AADE.
In particular, registration via Taxisnet is no longer required for off-platform bookings, as was the case in the past. Registration will only concern the net amount of the reservation, without including additional costs such as VAT, taxes or fees. However, the amount must include additional charges, such as cleaning costs or platform fees.
2. Owner Restriction (Tax Identification Number)
The explanatory circular confirms that the new legislation introduces restrictions for individuals, who are only allowed to manage two properties per VAT numberFor those who wish to exploit more than two properties, they will need to establish company (e.g. IKE, LTD). However, there is a new exception that allows the creation of a third AMA for properties with two rooms that are rented with different AMAs, which affects several owners.
3. End of Resilience in the Climate Crisis
The circular confirms the implementation of End of Resilience in the Climate Crisis for all owners and businesses that operate short-term rentals. The fee ranges from €0.5 to €10 depending on the size of the accommodation and the rental period.
4. Definition of Short-Term Lease
The circular clarifies that a lease is considered short-term if its duration is less than 60 daysIn cases of longer duration, such as an 80-day reservation via a platform, the option of "breaking" the reservation into smaller pieces (each reservation not exceeding 60 days) remains.
5. Opening of Branches and End of Business
Furthermore, according to article 15 of the circular, businesses who manage more than three properties must establish a branch and pay end of business (currently €600 per year). This will mainly concern apartments and can be imposed for each building managed.
6. Temporary Resident Fee
Regarding the temporary resident fee, the circular clarifies that this fee included in the taxable value Regarding the imposition of VAT, however, the question of whether individuals pay a non-resident fee remains open, with the AADE repeating the position that this only concerns businesses.
What are the Key Points for Direct Bookings?
The clarification circular leaves the framework for bookings made outside platforms (direct bookings) clear. The obligation to register all short-term rentals regardless of source is the most important new element. All bookings, whether through the most popular digital platforms or through your personal website, must be correctly registered and declared to the appropriate tax mechanism.
This ensures that all booking types (digital platforms or direct bookings) are treated in the same way, without differentiation, and it is now clear that the registration process concerns all short-term rentals, regardless of the booking channel.
The establishment of this unified registration process strengthens transparency in transactions and protects the interests of accommodation owners, giving them a clear way to record their income, while facilitating the implementation of tax obligations.
The AADE's clarification circular brings important developments and clarifications for short-term rental managers, incorporating new regulations regarding registration procedures, tax obligations and off-platform deductions. It is imperative that you are fully informed and follow these procedures to ensure the legality of your business and avoid potential penalties or problems with the tax authorities.
See here legislation and related videos.
Video (Application Presentation)
Video on how to register