How to set up multiple city tax based on different room types

City Tax Management

You can now define city tax rules specific to each room type. This feature is especially useful for serviced apartment rentals, who manage properties in different locations with varying city tax rates or types (e.g., per person, per room, or percentage). By tying city tax rules to room types, you can ensure accurate and location-specific city tax calculations.

Setting up a specific city tax rule:

Navigate to Settings / Room types / Select the required room type and click on edit.
“Apply default city tax settings” toggle in the room type configuration must be turned off (greyed out). This allows unique city tax rules to be assigned to selected units.

Key Points:

Future Reservations Only: Defined city tax rules apply exclusively to future reservations and do not retroactively affect existing reservations.
City Tax Inclusion in Pricing: Room type-based city tax calculations do not change whether the tax is included in your defined prices or added on top.
- The inclusion or addition of city tax depends on the Tax Model configured in Settings > General Settings > Tax Model.
- This setup determines how total prices are displayed on your booking engine (IBE) and the total price of reservations received from various OTAs. For detailed information on the inclusion model please check your Tax model settings in SabeeApp and in the OTA’s extranet.

Rules for Modifying Tax Settings (in Settings / Tax model menu)

When tax settings are updated, the following rules apply:

VAT Changes
- If the VAT value is modified and you choose to apply the changes to future reservations, the updated VAT value will be applied to all future reservations, regardless of room type or settings.
City Tax Changes
- If the city tax value is modified and you opt to apply the changes to future reservations, the system performs a background check on all room types:
  - For room types where the “Apply default city tax settings” toggle is enabled (ON), the updated city tax value is applied to future reservations, as you just modified the default city tax.
  - For room types with unique city tax rules defined (“Apply default city tax settings” toggle OFF), the updated value is not applied, and the unique rules remain in effect.

This ensures that default and custom city tax rules are respected when tax settings are updated.

Reservation Adjustments

Room Type Changes

If a reservation is moved to a unit with different city tax rules, the system recalculates city tax values accordingly.

Before billing city tax items: The system updates the Folio with new city tax values based on the destination unit’s rules.
After billing city tax items: “System generated” city tax items are added to reflect adjustments.

Additionally:

If the new room type has a different price, a popup allows users to choose between:
1. Keep original prices: Retains the old price but updates city tax.
2. Apply new prices: Updates both the room price and city tax. “System generated” items may be created for billed accommodation.

Group Reservations

The system supports group reservations with mixed city tax rules:

Manual Group Creation: Each reservation in the group follows the city tax rules of its assigned room type. A notification popup informs users about the mixed tax setup.
API/Channel Reservations: Same rules apply to group reservations created via API, IBE, or sales channels, ensuring accurate city tax calculations for all group members.

Example Scenarios for Moving Reservations

Room Type Change Before Billing

Original Room: Double Room (1 EUR/person/night) → 2 nights, 1 adult → Folio reflects 2 EUR city tax.

New Room: Bungalow (5 EUR/person/night) → Folio updates to 10 EUR city tax.

Room Type Change After Invoicing:

Original city tax items remain, with “system generated” adjustments for the new unit’s tax rules.

By clearly defining city tax rules and automating recalculations, this feature ensures compliance and accuracy for both individual and group reservations.