Since 1 July 2014 and the entry-into-force of the 6th State Reform, the Regions have the authority to regulate matters related to tourism, which include the authorisations needed to operate hotel businesses. The Brussels Ordinance of 8 May 2014 on tourist accommodation, issued under this new devolved authority, is expected to enter into force by the end of the year (after a first modification by an Ordinance dated 28 May 2015). The Government in Brussels also envisages the regionalization (i.e. a transfer from the municipalities to the Region) of the City Tax.
Operation of the business
The Ordinance provides for 6 categories of tourist accommodation:
- Hotel: the facility has at least 6 rooms and offers hotel services;
- Apart-hotel: the facility has at least 6 furnished apartments with kitchenette, and offers hotel services;
- Tourist residence: a furnished villa, house, apartment or room with kitchen and, as the case may be, hotel services for an additional consideration;
- Private housing: the individual proposes one of more separate rooms
- Tourist housing centre: a not-for-profit association offering separate or communal rooms, with hotel-type services and activities’ programme;
- Camp site.
As a matter of principle, the operation of tourist accommodation is subject to prior declaration and registration in one of the above-mentioned categories, and compliance with the conditions set out by the Ordinance.
For all categories of tourist accommodation, the following conditions must be complied with.
Concerning the operator-individual or the day to day manager, if the operator is a company: the operator is an individual or a legal entity incorporated in accordance with Belgian law, with EEA law or with the law of another State provided that its incorporation conditions are similar to those of Belgium or other EEA states, and the tourist accommodation is its main or ancillary corporate purpose. The operator has not been condemned, in Belgium or abroad, for a criminal offence, as listed by the Ordinance, and has valid civil liability insurance. The operator must also comply with labour and social legislation, incl. collective labour agreements.
Concerning the tourist accommodation: the compliance with fire safety regulations and with town-planning regulations is to be certified by the Municipality. The tourist accommodation must also be maintained, at all times, in a good state of maintenance and hygiene.
The operation of a hotel is subject to the following specific conditions:
- The hotel must be operated at least 9 months per year;
- The hotel must be clearly identifiable from the outside;
- The hotel must be permanently accessible to tourists;
- The hotel reception must be permanently accessible;
- The common areas are adequately lighted and ventilated;
- The inside and outside areas are in good condition and the common areas are cleaned daily as are the rooms provided;
- The hotel has sanitary installations available on the ground floor or on the floor above or below;
- The heating system ensures minimum temperatures in the rooms and the common areas;
- Each room has its own door, which is identified and can be locked;
- Each room has general lightening and natural lightening, with an outside view and a ventilation system if the window does not open;
- Each room has its own sanitary installations.
Infringements to the Ordinance might lead to an administrative fine and/or an operating ban.
This Ordinance is not yet in force, and the requirements it contains may be supplemented to by governmental decrees.
The “City Tax”
Municipalities raise a “City Tax”, which is mainly calculated on the “star” grading which denotes the quality of the hotel facilities, in terms of comfort and safety. Depending on the rating of the hotel, the municipal tax is a progressive tax, either by room and by night of occupancy or by room and by year8.
Some municipalities have opted for a lump-sum tax9, by room and by year, irrespective of the hotel rating.
This situation gives rise to economic distortions, depending on the location of the hotel in Brussels. Therefore, the operators are lobbying for harmonisation of the City Tax.
The Brussels Government intends to resolve the issue by transferring the “City Tax” from the municipalities to the Region. This solution might achieve the desired harmonisation but is not without certain tax disadvantages. When the “City Tax” becomes a regional tax it will no longer be deductible for corporate income tax purposes, whereas, a municipal tax is. Owners and operators should take this into account in their own business plans.