Portugal provides double taxation agreements for companies to avoid double tax collection. This article explains why these agreements do not apply to Cloudbeds customers.
Click here to check the DTA documentation provided by the Portugal government, so that the properties avoid double taxation and prevent tax evasion practices.
Here you will find the DTA provided by the United States Internal Revenue Service for Digital Arbitrage Inc (DBA Cloudbeds). It can be used to prove to your Tax Authority that any compensation or payment provided to Cloudbeds is exempt from VAT.
The Mod. 21 documents are issued by Booking.com, as they charge commission taxes on behalf of their headquarters in Amsterdam (and not in Portugal). Taxes remain in the European Union, but Portugal needs to prove that taxes have already been collected.
Since there is an agreement in the European Union, taxes are charged in Amsterdam and remain there, even if the services were done in Portugal.
Mod. 21 is a way to avoid double taxation (Amsterdam and Portugal for the same service) and also to prevent properties across the European Union from needing to report that they have paid taxes elsewhere, even though they have never paid taxes anywhere in the European Union.
Since Cloudbeds does not charge taxes in the European Union and, as we do not charge commissions on reservations, Mod. 21 does not apply to our customers.
If you need a DTA document for tax purposes related to commissions paid to the OTAs, please contact the channels directly to have them provide the DTA document to you. There is no such document for Cloudbeds services, as we do not charge commissions and do not pay taxes for the European Union.