Public space tax

What it means

Public space tax is a local tax for special use of municipal public areas, such as a summer terrace, a stall, scaffolding, an advertising structure, a circus, a funfair or storing materials. Public space means pavements, squares, parks and other areas open to everyone.

The municipality decides in a generally binding regulation which places count as public space and which uses are taxed. It sets the rate in euros per square metre per day or another time unit, and may vary it by location or purpose.

The tax differs from rent. If the municipality leases the land under a lease agreement, rent is paid and the public space tax no longer applies. In practice municipalities use one approach or the other for terraces and stalls, so it is important to find out which applies.

How it works in practice

The use must be notified to the municipality in advance, at the latest on the day it begins, and a permit for special use of a local road or an excavation permit is often needed too. Liability lasts from the start of use until the space is restored to its original condition.

For restaurants, the summer terrace is the most common case. The tax is based on the terrace area and the number of days, so it pays to measure the area accurately and state the actual period the terrace stands, not the whole year if it is removed in winter.

For events, promotions and building work where scaffolding occupies the pavement, the tax is part of the project budget. It is a deductible expense, and if a contractor pays it on the client's behalf it should be included in the price or recharged separately.

What to watch out for

Using public space without notification is an administrative offence, and the municipality may impose a fine and order the structure removed. Municipal police regularly check terraces and advertising boards in town centres, and the tax is then assessed retrospectively with a penalty.

A municipality may exempt, for example, cultural and charity events with free entry. If a company organises an event with a partner, check in advance whether the exemption applies, because a commercial presentation at a charity event may rule it out.