Accommodation provided as part of institutional spa healthcare is subject to the accommodation tax

The Supreme Administrative Court of the Slovak Republic, in its judgment Case No. 8Sfk/13/2023 dated 18^th December, 2025, dismissed the cassation appeal filed by Slovak Health Spa Turčianske Teplice, a. s. (hereinafter referred to as “the spa”) against the judgment of the Regional Court in Žilina (hereinafter referred to as “the administrative court”) in the matter of the refund of an overpayment of local accommodation tax at a facility providing institutional spa healthcare. In the opinion of the court of cassation, the accommodation of patients at the spa is subject to the accommodation tax. The accommodation facilities of therapeutic spas provide temporary lodging for a fee, and the taxation of such lodging corresponds to both the purpose and the statutory conditions of the accommodation tax.

The spa requested a refund of the local lodging tax overpayment because, in its view, as a provider of institutional health care, it was not required to collect and remit the lodging tax pursuant to Section 37 et seq. of Act No. 582/2004 Z. z. on Local Taxes and Local Fees for Municipal Waste and Minor Construction Waste, as amended, effective from October 15, 2014, through December 10, 2021 (hereinafter referred to as the “Local Taxes Act”).

The city of Turčianske Teplice, as the tax authority, denied the application on the grounds that the spa is the operator of a facility that provides temporary lodging for a fee and is therefore liable for the lodging tax. The Financial Directorate of the Slovak Republic concurred with this position, stating that the accommodation provided to spa guests constituted temporary lodging for a fee pursuant to Sections 754 through 759 of the Civil Code, and is therefore subject to the accommodation tax; for this purpose, it was irrelevant whether payment for the accommodation was provided by the relevant health insurance company under the public health insurance system or whether patients paid for the accommodation out of their own funds.

The Administrative Court dismissed the spa’s administrative action as unfounded and stated that, in order to determine whether the conditions of Section 37 of the Local Taxes Act have been met, it is essential to assess whether the individual conditions of this provision have been satisfied, namely that the accommodation is provided for a fee, that it is temporary, accommodation provided pursuant to Sections 754 through 759 of the Civil Code, and accommodation provided in a facility listed in Section 37 of the Local Taxes Act—all of which were met in the case at hand.

The Supreme Administrative Court reviewed the findings of the administrative court based on a cassation appeal filed by the spa. The key legal issue was whether the provision of lodging in connection with the provision of spa healthcare is subject to the lodging tax, i.e., a tax liability under the Local Taxes Act. It follows from Section 37 of the Local Taxes Act that, for a tax liability for the accommodation tax to arise, three basic conditions must be cumulatively met: (i) the provision of accommodation for consideration, (ii) the provision of temporary accommodation pursuant to Sections 754 through 759 of the Civil Code, (iii) the provision of lodging by an accommodation facility as defined by law. Spa healthcare is covered by public health insurance. Services, including lodging, are paid for by the client or are fully or partially covered by public health insurance. Lodging at a spa is thus always provided for a fee. According to the court of cassation, it is undisputed that spas provide accommodation for an agreed period during which the client has the right to use the premises reserved for their accommodation, as well as common areas, and also has the right to use services associated with the accommodation, such as room cleaning, towel replacement, bed linens, replenishment of toiletries, and the like. Based on the foregoing, the court of cassation holds the view that, in the case of spa guests, the definitional characteristics of an accommodation contract under the Civil Code are met, regardless of the fact that clients are provided with institutional spa healthcare. The fact that the spa provides accommodation for insured persons under a contract for the provision of health care does not affect the legal conditions defined in Section 37 of the Local Taxes Act, since, in addition to this relationship, an accommodation contract is simultaneously concluded between the insured person and the spa, or in favour of the insured person in the case of full exemption from payment.

The court of cassation also noted that the essence and purpose of the lodging tax, as one of the local taxes, is that even individuals who stay in the municipality only for a short time make use of public spaces and facilities managed by the municipality, and therefore should contribute financially to their improvement, construction, and maintenance. Spa accommodations engage in business activities consisting of providing temporary lodging for a fee, and their clients use public spaces and property administered by the municipality. Taxing such lodging with a property tax therefore corresponds to both the purpose and the legal requirements of the accommodation tax.

Judge Kristína Babiaková, M.A., attached a dissenting opinion to the ruling of the panel of the Supreme Administrative Court. Unlike the majority of Panel No. 8, she was convinced that the provision of lodging in connection with the provision of spa healthcare is not automatically subject to the lodging tax. In Judge Babiaková’s view, the condition of “payment for accommodation” for the tax liability to arise cannot be deemed automatically fulfilled even if such payment was covered in full or in part by public health insurance. In the event that a client’s accommodation is fully or partially covered by public health insurance—and were to be subject to the accommodation tax—Judge Babiaková held that this would result in an additional tax burden on the client/patient, who is entitled to free healthcare under public health insurance. In Judge Babiaková’s opinion, it was the responsibility of the tax authorities to verify whether such patients were among the individuals concerned and whether accommodation tax had been unlawfully collected from them during the relevant period.

The Supreme Administrative Court issued the judgment by a 2-to-1 vote; no appeal is admissible against it.

The decision was rendered by Panel No. 8 of the Supreme Administrative Court, composed of: President of the Panel JUDr. Anita Filová (Presiding Judge) and Judges Mgr. Kristína Babiaková and JUDr. Rastislav Dlugoš, PhD.