Balearic Eco-tax: A Guide for Holiday Home Owners in Ibiza and Formentera

If you are the owner of a holiday home in the Balearic Islands, it’s important to understand how the eco-tax works and what your obligations are towards the Balearic Tax Agency (ATIB – the regional tax authority).
In this article, I’ll clearly explain what this tax is, its purpose, and how to manage it correctly to avoid fines or accounting mistakes.

What is the Eco-tax?

The eco-tax, officially known as the tax on tourist stays, is a regional tax applied since 2016 throughout the Balearic Islands. This tax is paid by tourists staying in tourist accommodations, including apartments, villas, and holiday rentals.
Although the guest pays the tax, the property owner or manager is responsible for collecting, declaring, and transferring it to the ATIB.

Purpose of the tax

The revenue from the eco-tax is used to fund sustainability projects, protect the natural environment, improve tourist infrastructure, and preserve the cultural heritage of the Balearic Islands.
In other words, it helps offset the environmental impact of tourism and supports maintaining the unique landscapes and cultural identity that make Ibiza and Formetera so special.

When and how to file the tax

It is declared using Form 700 (quarterly):

• 1st quarter: April 1 to April 20

• 2nd quarter: July 1 to July 20

• 3rd quarter: October 1 to October 20

• 4th quarter: January 1 to January 20 of the following year

Annual summary: using Form 790, from January 1 to January 31 of the following year.

Common mistakes when managing the eco-tax

Some common mistakes to avoid:

• Not applying the tax to all bookings.

• Not keeping proof of the amounts collected.

• Not recording changes in the number of stay days.

• Not filing the forms within the deadlines.

• Not distinguishing correctly between seasonal periods.

Any of these mistakes can lead to surcharges or penalties from the authorities.

How it affects your accounting

Although the guest pays the tax, it does not form part of your income. It is an amount collected on behalf of the ATIB and must be recorded properly in your accounting to avoid inconsistencies in your tax filings and ensure it doesn’t distort your business performance.

How to manage the eco-tax without errors

I can help you:

• Track the taxes collected.

• File the quarterly and annual forms correctly.

• Compile data from your booking platforms.

The eco-tax is part of the legal obligations for any owner or manager of a holiday rental property in the Balearic Islands.

Need help with your holiday home?

Contact me to ensure your holiday home meets all Balearic tax obligations — simple, accurate, and on time.