There are two ways to automatically apply city tax to incoming reservations.

• If the city tax is simple, for example, if your tax rates are a fixed or relative rate, you can use product rules.
• If the city tax is more complicated, for example, if your tax rates vary based on your guest's stay durations you need to use fixed city tax.

In this article you can learn about how to set your city tax:

• Using product rules
  • To exclude city tax from the reservation cost
    • Step1: Create a city tax product
    • Step 2: Create the product rule
  • To include city tax in the reservation cost
    • Step1: Create a city tax product
    • Step 2: Create an accommodation adjustment product  
    • Step 3: Create the product rule
• Using the fixed city tax feature
• City tax and channel manager
  • Fixed city tax

Using product rules

Set up city tax as a product and automatically apply it to incoming reservations with product rules. Note: The way you set up city tax depends on whether you want to include or exclude city tax from the reservation price. If you're not sure, check with your local tax authority.

To exclude city tax from the reservation cost

Step 1: Create a city tax product

1. In Mews Operations, go to the main menu  > Settings > Services.
2. Select your bookable service.
3. Click Products.
4. Click the + button, then click + Product.
5. Under Name, enter "City tax."
6. Enter the amount and tax rate for your city tax.

• If the city tax is an absolute value, for example, €2.50, then select the Fixed option and enter it under Amount. When you enter a amount, you also need to choose a currency.
• If the city tax is relative to the cost of the stay, for example, 2%, then select the Relative option and enter the percentage under Percentage value. Choose the relevant fields.

7. Under Product options, make sure to select the Exclude price from offer option. 
8. Under Classifications, select City tax. 
9. Click Create.

Step 2: Create the product rule

1. In Mews Operations, go to the main menu  > Settings > Services.
2. Click on your bookable service.
3. From the Settings menu, click Product rules.
4. Click the + button.
5. In the Priority field, enter a number that's lower than all of your other product rules, to make sure Mews applies it to every incoming reservation. Note: You can enter a negative value to make sure it's the highest priority product rule.
6. Fill in other relevant details and click Create. 
7. Under Rule action, select Add.
8. Under Product, choose the city tax product.
9. Click Create and then click Save.

To include city tax in the reservation cost

Step 1: Create a city tax product

1. In Mews Operations, go to the main menu  > Settings > Services.
2. Select your bookable service.
3. Click Products.
4. Click the + button, then click + Product. 
5. Under Name, enter "City tax."
6. Enter the amount and tax rate for your city tax.

• If the city tax is an absolute value, for example, €2.50, then select the Fixed option and enter it under Amount. When you enter the amount, you also need to choose a currency.
• If the city tax is relative to the cost of the stay, for example, 2%, then select the Relative option and enter the percentage under Percentage value. Choose the relevant fields.

7. Under Product options, make sure Exclude price from offer is deselected.
8. Under Classifications, select City tax. 
9. Click Create.

Step 2: Create an accommodation adjustment product

1. In Mews Operations, go to the main menu  > Settings > Services.
2. Select your bookable service.
3. Click Products.
4. Click the + button, then click + Product. 
5. Under Name, enter "Accommodation adjustment."
6. Enter the amount for the product, the amount should be the same as your city tax, but with a negative value. The accommodation adjustment cancels out the cost of the city tax.

• If the city tax is an absolute value, for example, -€2.50, then select the Fixed option and enter it under amount. When you enter the amount, you also need to choose a currency.
• If the city tax is relative to the cost of the stay, for example, -2%, then choose Relative and enter the adjustment under Percentage value.

7. Enter the Tax rate and Accounting category of the adjustment product. These should match the Tax rate and Accounting category set up in your stay service.
8. Under Product options, select Exclude price from offer and Bill as package.
9. Click Create.

Step 3: Create the product rule

1. In Mews Operations, go to the main menu  > Settings > Services.
2. Click on your bookable service.
3. From the Settings menu, click Product rules.
4. Click the + button.
5. In the Priority field, enter a number that's lower than all of your other product rules to make sure Mews applies it to every incoming reservation. Note: You can enter a negative value to make sure it's the highest priority product rule.
6. Fill in other relevant details and click Create. 
7. Under Rule action, select Add.
8. Under Product, choose the city tax product.
9. Click Create. 
10. Repeat the above steps, but select Accommodation adjustment under Product.

Using the fixed city tax feature

If you're already using a product rule to add city tax to reservations, you need to update the product rule before turning on an automatic city tax.

1. In Mews Operations, go to the main menu  > Settings > Services.
2. Select your bookable service.
3. In your General settings, find the City tax field and select your city. If you can't find your city, it may not be supported yet.
4. Under City tax mode, choose if you want to include or exclude the city tax from the reservation price. If you exclude the city tax, Mews charges it on top of the reservation price. For example: if your city tax is €2 and a guest makes a reservation for one night at a rate of €10 per night, the guest pays €12.
5. Under the Options section, in the Options field, from the drop-down menu select Bill as package. Note: Unselect the Has expanded bill items if you have it selected. 
6. Click Save.

Note: You cannot modify fixed city tax rates like you can modify product rules, so if your city tax is due to change it's important to inform Mews Support to start the updation process in advance. You can learn more about handling tax rate changes here. 
 

City tax and channel manager

City tax as a product follows the same flow as all products in channel managers.

Fixed city tax

• Mews never sends the fixed city tax price to the channel manager.
• The system automatically assigns fixed city tax to all reservations.
• You can add it to channel manager reservations either on top or include it in the price. This depends on whether you select the Included in price or Excluded from price in the City tax mode field of your stay settings. 
  • If you select Excluded from price, Mews adds it on top of the total reservation price.
  • If you select Included in price, Mews includes it in the total reservation price.

You can learn more about how to handle tax rate changes including city tax here.