Tax-on-Commission: The Hidden Markup Your Expedia Contract Doesn't Show, By Country

You negotiated 15% commission with Expedia. You see 15% on every invoice line. But your bank statement says 17.85% of gross bookings is going to Expedia. Where did the extra 2.85% come from?

Tax-on-commission. Most jurisdictions treat the OTA commission as a taxable service, charging VAT, GST, or digital-services tax on top of the commission itself. It's billed back to you, compounding your effective cost above the headline rate — and most hoteliers never notice until their year-end audit.

01The formula

effective_rate = contract_rate × (1 + tax_on_commission_rate)

So a 15% contract rate with 19% VAT on commission gives an effective rate of 15% × 1.19 = 17.85%. That's ~2.85 percentage points of hidden cost on every OTA booking.

02Country-by-country table

Rates verified against each country's tax authority as of Q1 2026. Rates change; the table below is the baseline, not legal advice. Your accountant should verify for your specific situation.

03Where it appears on your Expedia invoice

Partner Central → Accounting → Invoices. Open any monthly invoice CSV. The tax-on-commission is usually a separate line item labelled 'VAT on commission', 'IVA sobre comisión', or similar depending on your property's tax jurisdiction. In some jurisdictions (notably the EU B2B cases with valid VAT IDs), Expedia doesn't collect the tax directly — you self-assess via reverse-charge on your return. The commission still has the tax; you just pay it to your government instead of to Expedia.

04Can you reclaim tax-on-commission?

Mostly no. Tax-on-commission is a tax paid to the government, not to Expedia. Disputing it with Partner Central gets you nothing because the money isn't theirs to refund. However, three things you can do:

1. 1If your property is VAT-registered in the EU or UK, you can reclaim the VAT-on-commission as input VAT on your VAT return — it's a legitimate business input. Most accountants handle this automatically; verify yours does.
2. 2If the underlying commission is reclaimed (no-show, early departure, waiver), the tax-on-commission is reclaimed proportionally. Expedia issues a credit note covering both. This is automatic — you don't need to ask for it.
3. 3If your tax-on-commission appears on the wrong jurisdiction (common when your property is in one country but your billing address is in another), open a Partner Central case to correct the tax jurisdiction flag. This is an invoice correction, not a dispute.

05How this compounds on Booking.com

Booking.com's Connectivity model is functionally identical: headline commission plus jurisdiction-specific tax-on-commission. The tax rates are the same (they're set by the government, not the OTA). The difference is where it appears — Booking.com invoices commission gross of tax and applies the reverse-charge note in the same document.

06What to do in your next rate negotiation

When a Partner Care rep offers you a commission reduction, ask whether it's gross or net of tax-on-commission. A 1-point reduction on a 19% VAT jurisdiction is 1.19 effective points off your real cost. Over the course of a year, that's not trivial — and most reps will agree to a slightly deeper headline cut if you frame it in effective terms.