A city tax or levy can be applied as a flat rate, as a percentage. In some cases, specific regions have very specific City Tax rules, such as in Edinburgh. Edinburgh City Council has introduced a Visitor Levy (city or tourist tax) that applies to overnight accommodation bookings. You can find out more about City Tax in our City Tax article.
Edinburgh visitor levy - Key features
Here are some of the key rules of the Edinburgh visitor levy to consider:
Booking Date: Only applies to bookings made on or after 1st October 2025.
Stay Date: Only applies where the stay is from 24th July 2026 onwards.
Duration: Applies to the first 5 consecutive nights only.
Rate: 5% on net accommodation only.
VAT: VAT applies to the levy.
Calculation is on the net accommodation cost, with VAT then added on top.
Advertising: Rates can be advertised inclusive or exclusive, as required by your property.
You can configure City Tax inclusive rates within Guestline Rezlynx PMS.
For more detailed information about Edinburgh's Visitor Levy, please refer to:
Edinburgh visitor levy – configuration steps
Complete the configuration using the 4-step process below:
Step 1: Create a city tax analysis code
This only needs to be created once within the system. The benefit of creating an analysis code specifically for City Tax is that will show within the Period End reports with its own analysis code line, so that your finance team can easily track the city tax value when submitting the quarterly reports on this levy.
To create an analysis code, follow the steps below:
Navigate to System, Codes and Rules, then Analysis Codes.
Click New Analysis Code.
Complete the information as required:
Analysis Code: Enter a code in capitals up to 12 characters long, using an underscore for a space. Do not start the code with a number. For example, CITYTAX
Group Code: Select where this analysis code will be stored within the left-hand menu.
Tax Rule: Select from the drop-down menu or create a new Tax Rule for this purpose, as this should be vatable at 20%.
Usage: Select from the drop-down menu for how to use this analysis code.
Description: Enter a clear description, which will be shown on invoices.
Revenue Type: Select Non-revenue from the drop-down menu. If you do not have a non-revenue revenue type, you can create a non-revenue revenue type.
System Use: Do not select this box; this will make the analysis code unselectable.
Click Save.
⚠️ Important: If you use the financial export routine, ensure that your accounts team are aware and that this code is mapped correctly once created.
Step 2: Auto Add City Tax
To add an automatic percentage per room per night, follow the steps below:
Navigate to System, Rates, City Tax and Surcharges.
Create a New Rule using the newly created analysis code, setting the following information:
Code should be a clear identifier, for example, EDINBURGH.
Set the Description as it should appear on the guest bill when using Exclusive mode.
Post to is where the charge should be sent, this was created in Step 1.
Mode is per room.
Value should be set to Variable, and a new box appears at the bottom:
Click plus+ icon.
Start date to be set based on local rules; in this case, the stay start date is 24.07.2026.
End dates set as required or until system maximum of 31.12.2099.
Rate From enter 0.
Rate To 9999.99.
Value enter 5 for 5%.
Type is percentage.
Apply Charges to Nett Value.
Tax Mode select Nett Value.
Must stay leave blank as no minimum stay is required.
Stop Charging After 5 nights. This ensures the levy only applies to the first 5 consecutive nights of any stay.
Apply to reservations created on or after box must be checked, and the date set based on local rules, in this case 01/10/2025.
⚠️Important: This critical setting ensures the levy only applies to bookings made from 1st October 2025 onwards, regardless of when the actual stay occurs.
Analysis Code is where the charge is calculated from; select all Accommodation analysis codes. Multiple Analysis codes can be selected. This ensures the levy is calculated only on accommodation charges, excluding extras such as parking, meals and drinks, transport services, and other ancillary services.
3. Click Save.
Example of this configuration:
Step 3: Add Auto Add City Tax to Rate Plans
To add auto-add city taxes to rate plans, follow the steps below:
Navigate to your rates, via System, Rates and Rate plans.
Select a rate plan, within the RULES section, and within the Surcharge / City Tax 1 drop-down menu, select the Edinburgh city tax you created.
Click Save Changes.
Repeat this process for each rate plan that should have the city tax applied to it.
Example of this configuration:
Step 4: Reservation Re-save
A reservation re-save is not required, unless you are making these configuration changes after the 1st October 2025.
If you have made configuration changes after 01.10.2025, you can schedule a reservation re-save.
Alternatively, for each reservation created on or after 01.10.2025 you would need to navigate to each reservation and update the booking line to pick up the new City Tax set up.
Important configuration notes
VAT Treatment
The Edinburgh Visitor Levy is subject to VAT. The system will:
Calculate 5% on the net accommodation value.
Apply 20% VAT to the levy amount.
Display the final levy amount inclusive of VAT.
Calculation Examples
Exclusive Mode - City Tax added on top of quoted rate
Example 1: £100 Accommodation Only (Exclusive of City Tax)
Net accommodation: £83.33 (£100 ÷ 1.20)
Levy (net): £4.17 (£83.33 × 5%)
Levy + VAT: £5.00
Final Total: £105.00
Example 2: £100 including £40 Extras (Exclusive of City Tax)
Net accommodation: £50.00 (£60 ÷ 1.20)
Levy (net): £2.50 (£50.00 × 5%)
Levy + VAT: £3.00
Final Total: £103.00
Inclusive Mode Examples - City Tax included within quoted rate
Example 3: £100 Accommodation Only (Inclusive of City Tax)
Working backwards: Net accommodation = £79.37 (£100 ÷ 1.26)
Levy (net): £3.97 (£79.37 × 5%)
Levy + VAT: £4.76
Accommodation (inc VAT): £95.24
City Tax (inc VAT): £4.76
Final Total: £100.00
Example 4: £100 including £40 Extras (Inclusive of City Tax)
Accommodation portion: £60.00 (of the £100 total)
Net accommodation: £47.62 (£60 ÷ 1.26)
Levy (net): £2.38 (£47.62 × 5%)
Levy + VAT: £2.86
Accommodation (inc VAT): £57.14
Extras (inc VAT): £40.00
City Tax (inc VAT): £2.86
Final Total: £100.00
Exemptions
Certain guests are exempt from the Visitor Levy, including:
People using accommodation as their primary residence.
Recipients of specified UK and Scottish disability benefits.
Homeless individuals or those in temporary accommodation.
📌Note: Exempt guests must pay the levy initially and claim reimbursement directly from Edinburgh City Council within 5 working days.
Inclusive vs Exclusive Pricing Strategy
Running Levy Exclusive
Advantages:
OTA commissions are calculated on accommodation only.
Clear transparency for guests.
Easier revenue management.
Guest invoice will display a line for the rate and another for the city tax or visitor levy.
Disadvantages:
Additional charges at checkout.
Potentially less competitive if displayed rates appear higher.
Running Levy Inclusive
Advantages:
Simpler guest experience.
More competitive displayed rates.
Guest invoice will display one line for the rate including the city tax or visitor levy.
Disadvantages:
No OTA commission on levy portion.
More complex revenue calculations.
Find out more in our guide, configure City Tax inclusive rates.
Reporting
In accordance with Edinburgh Visitor Levy requirements, accommodation providers must submit quarterly reports detailing total accommodation charges and total levy collected.
If you have established a specific analysis code for this levy - as per Step 1 Configuration outlined above - this information can be retrieved through Period End reports.
To view an analysis code report, follow the steps below:
Navigate within Rezlynx PMS to Accounting, Period End, then select Period End Archive.
Use the filters to find the required months.
Select View next to the End of Month report to view the report in your preferred format.
Calculate the total accommodation and city tax charges attributed to each accommodation and city tax analysis code for the required quarter.
Alternatively, select Detailed Export to generate a CSV file containing a comprehensive line-by-line breakdown of all revenue attributed to the analysis codes.
This process ensures accurate reporting and compliance with Edinburgh City Council's visitor levy requirements which will need to be submitted from 24th July 2026.