Operation ‘Best Holidays’ is an all out assault on the accommodation sector at its busiest time of the year as tax inspectors across the country, most especially in tourism hotspots such as the Algarve, have been told to concentrate on un-invoiced income by tracing bookings made online.
The 'Best Holidays' operation was tested before national launch with 80 tourist accommodation establishments being tracked and where 30% were found to not to have put all income through the books, primarily from bookings made through third party websites.
In a statement today the Ministry of Finance confirmed the all out inspection now has the green light and reports of "serious offenses" are flooding in.
"In compliance with the strategic objective of combating the black economy, tax evasion and fraud, the tax office has in recent months undertaken a series of measures to monitor and evaluate operators in the tourist accommodation sector to combat the illegal trade of ‘parallel beds’ which is a severe form of tax evasion and leads to unfair competition among regular tour operators," said the Secretary of State for Fiscal Affairs.
A special force of 150 tax inspectors has been targetting businessed that take bookings from third party websites often used by tourists and have been monitoring occupancy levels since January 1, 2013 until now.
The taxman has been looking at websites which charge a commission for each booking so as to monitor occupancy rates. The establishments under surveillance were selected from those that paid fees to web-based booking companies in 2012.
The tax office now will find it easy to collect evidence for 2013 and 2014, and verify that reservations made through websites actually were invoiced and declared to the tax authorities.
The many paperless online bookings websites are used mostly by tourists from outside the country and are less likely to ask for or want proper receipts for their stays. It then is tempting for accommodation owners not to declare the income.
With the test period showing 30% are evading taxes, the fight is on with an empowered well staffed and smart tax department against accommodation providers.
What the market now can be sure of is that long-term monitoring of private villa rental is already being tracked using similar methods.
