Spain to raise VAT on bars, restaurants and hotels, warning of chain closures

The European Commission has recommended that Spain increase the value‑added tax applied to the hospitality sector, including bars, restaurants and hotels. Spanish hospitality officials argue the move would be "catastrophic" for businesses, warning that higher taxes could be passed on to consumers, trigger a wave of closures and reduce families' ability to spend on dining and travel. Antonio Aparicio, vice‑president of Spain’s hospitality industry, said the sector has enjoyed a reduced VAT rate since 1986 as compensation for other burdens and stressed the need to defend that right. He warned that the tax hike would either be absorbed by business owners, which is unlikely, or transferred to prices at a time when Spaniards are already cutting back on consumption, potentially leading to a chain reaction of shutdowns across the industry.