HICAP Asia Pacific 2013, Hong Kong
Mayer Brown JSM is proud to be sponsoring this year's Hotel Investment Conference Asia Pacific 2013 (HICAP 2013), which takes place from 16-18 October 2013 at the InterContinental Hong Kong. Several members of our Hospitality and Leisure Group will be attending.
We look forward to seeing you there. If you would like to get in touch or arrange a meeting with us prior to the event, please contact a member of our team, listed on the right.
The Sagas of Strata-Sale of Hotel Units in Hong Kong
By Andrew MacGeoch and Emily Wong, Hong Kong
In Asia, we have been seeing more strata-sale of hotels by property developers in recent years. This usually involves a developer selling hotel units to individual purchasers who then put the hotel units back into the hotel inventory to be rented out to third-party guests. Such individual purchasers receive the benefit of any rental profit from the operations of the hotel.
In Hong Kong, the first time a developer sold units of a hotel located in Hong Kong to individual purchasers ended up in the unwinding of the sale as the Securities and Futures Commission (SFC) asserted that the developer had not obtained the necessary approvals from the SFC. The SFC considered the sale to be a Collective Investment Scheme (CIS) as defined in the Securities and Futures Ordinance (SFO). This article discusses the recent unwinding of the sale of the Apex Horizon hotel in Hong Kong and its implications for hotel developers and operators.
Online Travel Agent and Hotel Operators – Agent or Principal?
By Mark Prinsley and Anne-Marie Chirema, London
The UK Court of Appeal has given a significant judgment on the question of whether an online travel agent is acting as a principal or an agent in relation to liability for VAT on the provision of hotel accommodation.
The court has handed a significant victory to HMRC, the UK tax authority, against Secret Hotels2 (formerly MedHotels), overturning the decision of the Upper Tribunal (High Court). The court found MedHotels liable for VAT under the Tour Operators Margin Scheme (TOMS) on the grounds that it operated as a principal, supplying travel services in its own name, and not as an agent. MedHotels is now owned by Thomas Cook, but its former owners, lastminute.com, are liable for the £7 million tax obligation which dates from 2004 to 2007. The decision has not been further appealed.
Asset Managers: Don't Forget the Hoguet Law!
By Alexandra Plain and Karen Sauvageot, Paris
The Hoguet law is a French law pursuant to which individuals or legal entities that on a regular basis deal with or assist in transactions involving real estate assets owned by others – relating for instance to the sale, purchase, or letting of said assets – must hold a licence (carte professionnelle). Hence, this law applies to property managers, among others.
Germany: Cancellation of VAT Discount for Hotels Threatened
By Jürgen Streng, Düsseldorf
In early 2010 the German government introduced a substantial discount on VAT for hotels and reduced the standard 19 percent rate to 7 percent. It was no coincidence that room prices increased by 14 percent in 2010 and have continued to increase since. This contrasts with the previous 10 years where there was a reduction in rates across most German markets between 2001 and 2010 ranging from 25 percent in Berlin to 2 percent in Düsseldorf.
The government is now discussing cancelling this incentive for the hotel industry and applying the full rate of VAT. Needless to say this could have a substantial financial impact but it will be interesting to see the extent to which hotels will be able to maintain rates and whether its impact will be more severe in the luxury sector.