Stayntouch PMS Did You Know? Custom Tax Rules
Stayntouch PMS supports custom tax rules. This feature has allowed Stayntouch PMS to support a range of different countries and tax rules, all while maintaining a very unique and simple setup screen; whereas, other PMS companies need to custom code complex formulas. We also eliminate a lot of manual work for hotels that use custom tax rules. This has helped greatly in supporting tax changes during the COVID-19 period, which applied for a limited time only in many countries.
Below is an explanation of the custom tax rules you can configure and their functionality.
The three different tax rules are as follows:
- Tax Date Range
- Tax Length of Stay
- Tax by Room Type
To activate custom tax rules, in Hotel Admin, navigate to Settings > Financials > Financial Settings > Turn ON the TAX RULES toggle.
TAX DATE RANGE
We have a Tax Date Range rule for countries in which the government changes the taxes regularly, as hotels in these countries need to be able to automate the tax change in the system instead of manually completing these changes. Please note, Tax Date Range is specific to reservation stay dates NOT reservation creation date.
Example:
- A hotel has an accommodation tax set at 15% for 2021.
- The government has declared a new accommodation tax beginning on January 1, 2021, for 17.5%.
Scenario 1:
- Reservation Arrival: December 25, 2020
- Reservation Departure: December 31, 2020
- Accommodation Tax: 15%
- There is no change for this reservation or the guest invoice.
Scenario 2:
- Reservation Arrival: December 29, 2020
- Reservation Departure: January 2, 2021
- Accommodation Tax: 15% and 17.5%
- December 29-31, 2020 will be taxed 15%.
- January 1-2, 2021 will be taxed 17.5%.
- The guest invoice will show the tax breakdown for 15% and 17.5%.
Scenario 3:
- Reservation Arrival: January 1, 2021
- Reservation Departure: January 2, 2021
- Accommodation Tax: 17.5%
- The reservation will be taxed 17.5% for the entire stay.
- There is no change for this reservation or the guest invoice.
Scenario 4:
- Reservation Arrival: January 1, 2026
- Reservation Departure: January 2, 2026
- The hotel forgets to add a tax rule percentage for the new date range. The reservation will automatically use the base tax percentage set for the charge code. In the below example, that is 10%.
Stayntouch PMS Configuration:
- Log into Hotel Admin and navigate to Settings > Financials > Charge Codes.
- Select + ADD NEW or edit an existing charge code. Please note, the charge code type must be set to Tax.
- Navigate to the CONFIGURE NEW TAX RULE AMOUNTS section.
- Select + ADD NEW TAX RULE and select a date range for which to configure a custom tax rule.
NOTE: You cannot configure overlapping date ranges. The tax behavior, be it % or $, will always be taken from the charge code configuration. One charge code cannot have both % and $ configured for tax rules.
TAX LENGTH OF STAY (LOS)
We have a Tax Length of Stay (LOS) rule for countries in which guests staying at a hotel longer than 28 days will be subject to lower tax than the standard tax.
Example:
- A hotel has a standard accommodation tax set at 15%.
Scenario 1:
- Reservation Arrival: December 1, 2020
- Reservation Departure December 25, 2020
- Accommodation Tax: 15%
- The guest will be charged the standard 15% tax on all charge codes.
Scenario 2:
- Reservation Arrival: December 1, 2020
- Reservation Departure: December 29, 2020
- Accommodation Tax: 9%
- If, from the beginning, the guest reservation was booked for 29+ days, the guest is subject to a 9% accommodation tax from day 1.
Scenario 3:
- Reservation Arrival: December 1, 2020
- Reservation Departure: December 25, 2020
- The guest decides to extend the reservation to December 29, 2020.
- Accommodation Tax: Changes from 15% to 9%
- If, during their stay, the guest decides to extend their stay to December 29, 2020, they then fall into the 9% LOS bracket.
- The hotel is obliged to adjust all revenue charged with 15% and repost the new 9% tax. The hotel will need to issue a proper credit note for these changes.
Scenario 4:
- Reservation Arrival: December 1, 2020
- Reservation Departure: December 29, 2020
- The guest decides to shorten the reservation to December 22, 2020.
- Accommodation Tax: Changes from 9% to 15%
- If a guest decides to shorten their stay to less than 28 days, they are no longer eligible for the 9% accommodation tax.
- The hotel is obliged to adjust all revenue charged with 9% and repost the new 15% tax. The hotel will need to issue a proper credit note for these changes.
Scenario 5:
- Reservation Arrival: December 1, 2020
- Reservation Departure: December 29, 2020
- Accommodation Tax: 9%
- The guest wishes to complete an advance bill for the entire stay at the time of check-in. If, during the stay, the guest decides to leave on December 25, 2020, they would no longer be eligible for the 9% accommodation tax. Because the guest has paid in advance, the hotel is not obliged to change the posted revenue charge codes, so the bill will remain as is.
NOTE: Adjustment/reposting of revenue is completed by the hotel manually.
Stayntouch PMS Configuration:
- Log into Hotel Admin and navigate to Settings > Financials > Charge Codes.
- Select + ADD NEW or edit an existing charge code. Please note, the charge code type must be set to Tax.
- Navigate to the CONFIGURE NEW TAX RULE AMOUNTS section.
- Select + ADD NEW TAX RULE and LOS to configure a custom tax rule for this period.
NOTE: You cannot configure overlapping LOS rules.
TAX BY ROOM TYPE
We have a Tax by Room Type rule mainly for resort hotels that reserve the right to charge a different tax for different room types.
Example:
- Tax for a standard room is 15%.
- Tax for a suite room is 15.5%.
Scenario 1:
- A reservation made for a standard room type is subject to 15% tax on the accommodation revenue.
Scenario 2:
- A reservation made for a suite room type is subject to 15.5% tax on the accommodation revenue.
Scenario 3:
- A reservation made for a standard room type is subject to 15% tax on the accommodation revenue.
- However, if the guest decides to upgrade to a suite during the stay, the following apply:
- If the revenue has not been posted yet, it will then automatically post to 15.5%.
- If the revenue has been posted, it is up to the hotel to adjust the already posted revenue from 15% to 15.5%. Stayntouch PMS will only provide a warning message.
Scenario 4:
- A reservation made for a suite room type is subject to 15.5% tax on the accommodation revenue.
- However, if the guest decides to downgrade to a standard room during the stay, the following apply:
- If the revenue has not been posted yet, it will then automatically post to 15%.
- If the revenue has been posted, it is up to the hotel to adjust the already posted revenue from 15.5% to 15%. Stayntouch PMS will only provide a warning message.
Stayntouch PMS Configuration:
- Log into Hotel Admin and navigate to Settings > Financials > Charge Codes.
- Select + ADD NEW or edit an existing charge code. Please note, the charge code type must be set to Tax.
- Navigate to the CONFIGURE NEW TAX RULE AMOUNTS section.
- Select + ADD NEW TAX RULE and room types to configure a custom tax rule for the required room types.
NOTE: Multiple tax rules cannot have the same room types. They need to be unique. Any room type that is not part of the custom rule will assume the base tax amount configured. In our example, it is 15%.
NIGHTS RANGE
We have a Nights Range custom tax rule for properties that have the TAX RULES toggle turned ON from Settings > Financials > Financial Settings. To configure a Nights Range custom tax rule, navigate to Settings > Financials > Charge Codes. When you create a new charge code or edit an existing one, you can now select an Enable Nights Range checkbox, which will allow you to select Nights Range in the CONFIGURE NEW TAX RULE AMOUNTS section.
Upon selecting Nights Range, you can enter tax rule amounts based on the number of nights the guest plans to stay at your hotel. In the example below, guests are charged a tax of €1 for a stay of 1 to 2 nights and a tax of €2 for a stay of 3 to 4 nights.
