A Serious Problem with VAT

At the time of going to press, the whole golf industry was deeply concerned, disturbed and annoyed by the brutal increase in VAT (IVA in Spain). In rising from a reduced eight per cent to the new general rate of 21 per cent – an abrupt increase of 13 per cent – the higher tax will have major repercussions for this tourism sector, which has been making supreme efforts to survive in the midst of a global crisis that is having a significantly negative effect on the industry. In recent years, in spite of “restructuring” and “re-dimensioning” initiatives to ease the effects of the crisis, golf courses are still struggling to survive.. Key markets have slumped – in the case of Andalucía, the British, Irish, etc. – and other emerging markets have failed to rally.

The IAGTO (International Association of Golf Tour Operators) sent a very worrying letter to the golf federations in Spain’s tourist areas, warning that if VAT rose from eight to 21 per cent our destination would suffer a major reversal. The result will be contrary to what the measure aims to achieve: i.e. increased tax collection. It will, in fact, suffer a considerable decline because revenue will be drastically reduced and other golf destinations will emerge stronger – perhaps permanently.

No one understands why – suddenly, without any anaesthetic – VAT is being increased by 13 percentage points and golf clubs are not being taken into account as infrastructures of touristic interest rather than mere sports entities. Please understand this once and for all, decision-makers in the treasury: golf is an inseparable component of tourist amenities throughout Spain, in both the coastal areas and inland. With that in mind, and there could be a ray of hope here to right this wrong, the national Minister for Tourism, the Andalucian regional Ministry of Tourism, the various provincial tourism promotion boards and other institutions agree that golf courses should be treated as tourist entities, subject to a reduced VAT rate, as has always been the case.

If they don’t achieve this, it will be a catastrophe for the industry and for tourism in general. We can only hope that someone finally sees the light and reconsiders the increase.

In the meantime, we are pleased to report that our magazine is the only one in Spain to be granted Approved Publication status by the IAGTO. A great honour for us and an incentive to continue putting all our best efforts into overcoming these difficult times for the media industry.