Effects of the During the COVID-19 Crisis Reduced Value Added Tax Rates

The project investigates the effects of a reduction in VAT rates as a result of the COVID-19 crisis. In addition to an assessment of the legal compatibility with the VAT directives of the EU Commission and a literature review on the pass-through of VAT changes in the form of changed prices (in general and specifically in the accommodation sector), an empirical ex-post analysis performed to examine how a recent temporary change of VAT rates affected the number of overnight stays in the Austrian hotel industry. In this way, a first assessment of the effects of the current VAT changes is made.