Reduction in VAT on accommodation and catering services on the island of Lesbos

The massive influx of refugees and irregular migrants on the island of Lesbos, especially from September 2015 onwards, has caused a sharp decline in tourism there, in contrast to the increase elsewhere in Greece.

In April, May and June 2016, 9 904 visitors arrived, compared with 29 106 over the same period last year.

It is estimated that, by the end of the season, just over 20 000 tourists will have come to Lesbos, compared to over 75 000 in 2015, a shortfall of 55 000 tourists or 495 000 nights.

According to the Lesbos Hoteliers Association, each missed night is equivalent to the loss of at least one-and-a-half days’ pay and a consumption shortfall of five kilogrammes of fishery and farm products. A total loss of 742 500 days’ pay and a total consumption shortfall of at least 2 475 tonnes of food are the most conservative estimates.

Those employed in the Lesbos tourist industry are accordingly seeking immediate action in response to this situation and are requesting relief assistance.

In view of this:

Can the Commission, as part of the Troika, agree to an immediate reduction to the September 2015 level of VAT on accommodation and catering services on the island of Lesbos, as requested by its tourist sector?

Answer given by Mr Moscovici on behalf of the Commission

In light of the migration crisis, the Commission — together with the other European institutions monitoring the third economic adjustment programme — accepted the Greek authorities’ request that Lesbos retain, in 2016, the 30% discount on all VAT rates applicable in mainland Greece as permitted under Article 120 of the VAT Directive (2006/112/EC) that is being phased out in other islands of the Aegean.

As a result, accommodation and catering services in Lesbos benefit from a lower VAT rate this year than equivalent services in other Aegean islands, some of which have also been affected by the migration influx.

The Commission has not received a proposal from the Greek authorities to reduce the VAT rate on accommodation and catering services in Lesbos to the level in September 2015 and cannot speculate on such requests.