EU: Public consultation on VAT rules for travel and tourism sectors

The European Commission launched a 12-week public consultation to gather input from stakeholders on modernising value added tax (VAT) rules for the travel and tourism sectors.

According to the EU release, stakeholders, including businesses, member state authorities, and citizens, are invited to share their views on proposed reforms to the special VAT scheme for travel agents and the taxation of passenger transport services. Stakeholders can respond to an online questionnaire in all EU official languages or submit position papers via the Commission’s “Have Your Say” platform.

The consultation seeks feedback on two core issues:

• Special VAT scheme for travel agents: Current rules tax travel agents based on their margin and where they are established, but inconsistencies in application across member states and advantages for non-EU operators have given rise to unfair competition. Options under review include levelling the playing field with non-EU travel agents and clarifying the scope of the scheme.
• VAT rules for passenger transport: Existing rules, which determine taxation by distance travelled within the EU, impose administrative burdens on small operators and contribute to disparities between transport modes (e.g., zero-rating for international air transport vs. higher rates for land transport). Options under review include the simplification of the rules regarding the place of taxation.