| Purpose | Configure taxes and fees that change according to the length of a reservation. |
| Best for | Property admins responsible for tax and fee configuration. |
| Use this when | A tax rate changes after a specified number of nights or depends on the reservation's total duration. |
| Requirements | The applicable tax classification, calculation method, thresholds, amounts, and date ranges, confirmed with the local tax authority. |
| Expected result | Cloudbeds PMS applies the configured tax or fee according to the reservation's length of stay. |
| Limitations | Cloudbeds cannot determine which calculation method is required by local law. Confirm the correct rules with the local tax authority. |
Introduction
Length-of-stay tax rules automatically adjust a tax or fee according to the number of nights in a reservation. Use a per-night rule when each night is evaluated separately, or a full-stay rule when the reservation's total duration determines the rate applied to the entire stay.
Confirm the local tax requirements first, select the applicable calculation method, and then configure and test the rule in Cloudbeds PMS.
Table of contents
- Confirm the tax requirements
- Choose a calculation method
- Understand inclusive tax behavior
- Review configuration considerations
- Length-of-stay configuration examples
- Configure length-of-stay taxes
Confirm the tax requirements
Before creating the rule, contact the local tax authority and confirm:
- Whether the jurisdiction requires per-night or full-stay calculation.
- Whether the tax is inclusive of or added to the quoted rate.
- The night, date, and guest-count thresholds that trigger different rates.
- The correct tax classification for financial documents and guest invoices.
Choose a calculation method
Select the method according to whether each night or the reservation's total duration determines the tax rate.
Per-night based calculation
This method evaluates each night independently against the configured thresholds. Use it for step-down taxes whose rate changes after the guest stays a specified number of nights.
Example: A city tax is €7 per night for the first 8 nights and €4 per night from night 9 onward. Each night is evaluated individually.
Full-stay based calculation
This method evaluates the reservation's total duration and applies the matching rule to the entire stay. Use it for long-stay exemptions or tax brackets that differ between shorter and longer stays.
Example: A 21% VAT applies to stays of 1 to 28 days. For a stay of 29 days or longer, the tax becomes 0% for the entire stay.
Reservation extensions: If a reservation originally taxed for 20 days is extended to 30 days and becomes exempt, Cloudbeds automatically posts an offsetting transaction to reverse the tax charged for the initial 20 days.
Understand inclusive tax behavior
An inclusive tax is built into the quoted rate. When the inclusive tax rate changes, the effect on the guest total depends on whether another length-of-stay rule covers the remaining nights.
Inclusive full-stay calculation
In this example, the quoted rate is €100.00. A 22% tax applies for nights 1 to 28, and the tax becomes 0% from night 29.
| Night range | Room revenue | Tax | Total |
|---|---|---|---|
| Nights 1 to 28 | €81.97 | €18.03 | €100.00 |
| Night 29 onward | €100.00 | €0.00 | €100.00 |
The guest total remains €100.00 per night, but the amount previously allocated to tax becomes room revenue after night 28.
Alternative rate setup: If the guest total must decrease after the threshold, configure separate short-stay and long-stay rates. In this example, the short-stay rate is €100.00 and the long-stay rate is €81.97.
Inclusive per-night coverage
Expand each scenario to compare what happens when nights after the final configured threshold are either uncovered or covered by an explicit 0% rule.
No rule covers nights after the threshold
Setup: The quoted rate is $100.00. An inclusive 10% tax applies only to nights 1 to 5.
| Night range | Room revenue | Tax | Total |
|---|---|---|---|
| Nights 1 to 5 | $90.91 | $9.09 | $100.00 |
| Night 6 onward | $100.00 | $0.00 | $100.00 |
Because no rule covers night 6 onward, the tax stops applying and the room rate returns to the full quoted amount.
A 0% rule covers nights after the threshold
Setup: The quoted rate is $100.00. An inclusive 10% tax applies to nights 1 to 5, and a 0% rule applies from night 6 through Forever.
| Night range | Room revenue | Tax | Total |
|---|---|---|---|
| Nights 1 to 5 | $90.91 | $9.09 | $100.00 |
| Night 6 onward | $90.91 | $0.00 | $90.91 |
The explicit 0% rule continues the length-of-stay logic and passes the tax savings to the guest.
Review configuration considerations
- Classification: Select the applicable classification, such as VAT or Tourist Tax, for correct reporting.
- Calculation: An inclusive tax is built into the rate. An exclusive tax is added to the rate and directly changes the guest total when the tax rate changes.
- Maximum nights applicable: For a Fixed per guest fee, leave this option disabled when the tax must continue indefinitely or transition to another rule.
- Date range: Select Forever when the tax has no end date. Enable Repeats Yearly when a seasonal tax uses the same dates each year.
Length-of-stay configuration examples
Expand an example to review the settings for a common tax scenario.
20% VAT for the first 28 days
Scenario: A 20% VAT is included in the rate for the first 28 days. No rule covers night 29 onward, so the tax stops applying.
- Type: Tax
- Available for: Reservations
- Classification: VAT
- Calculation: Inclusive
- Rule: Percentage of Total
- Length of Stay: Per-Night Based
-
LOS rule: Minimum 1, maximum 28, amount 20%
Tiered VAT based on the total stay
Scenario: A 15% VAT applies to stays of 28 days or fewer. A 9% VAT applies to the entire stay when it exceeds 28 days.
- Type: Tax
- Available for: Reservations
- Classification: VAT
- Calculation: Inclusive
- Rule: Percentage of Total
- Length of Stay: Full-Stay Based
- LOS rule 1: Minimum 1, maximum 28, amount 15%
- LOS rule 2: Minimum 29, maximum Forever, amount 9%
If a 20-day reservation is extended to 30 days, an offsetting transaction reverses the original 15% tax and the 9% rate applies to the entire stay.
Seasonal tourist tax with length-of-stay reductions
Scenario: From May through October, adults are charged €4 per night for nights 1 to 9 and €1 per night afterward. From November through April, adults are charged €1 per night for nights 1 to 9 and €0.50 afterward. Children are exempt, and the tax is exclusive.
High season, May 1 through October 31:
- Repeats Yearly: Enabled
- Length of Stay: Per-Night Based
- LOS rule 1: Nights 1 to 9, adults €4, children €0
- LOS rule 2: Night 10 through Forever, adults €1, children €0
Low season, November 1 through April 30:
- Repeats Yearly: Enabled
- Length of Stay: Per-Night Based
- LOS rule 1: Nights 1 to 9, adults €1, children €0
- LOS rule 2: Night 10 through Forever, adults €0.50, children €0
Leave Maximum nights applicable disabled for all four rules.
Configure length-of-stay taxes
Add the tax or fee after the applicable calculation method and thresholds are confirmed.
- Go to Account
> Settings
> Finance
> Taxes and Fees.
- Select Add New Tax or Fee.
- Select the Classification and Calculation Method, either Inclusive or Exclusive.
- Under Length of Stay, select Per-Night Based or Full-Stay Based.
- Enter the night thresholds and amounts.
- Select Forever as the maximum when the rule has no upper limit.
- For a seasonal tax, configure the Date Range and enable Repeats Yearly when the same dates apply each year.
- Review the configuration, and select Save.
Confirm that the saved rules and date ranges match the requirements provided by the local tax authority.
Next Operational Step
Test the tax or fee on sample reservations within every configured threshold and date range, and confirm that the calculated amounts and offsetting transactions match the property's approved tax rules.
Comments
Please sign in to leave a comment.