The TOMS rules in the EU have been in place since the 80s and were designed to simplify VAT accounting for tour operators selling travel services across member states. However, the rules are complex and inconsistent, and the EU is considering reforming them to achieve a fair distribution of VAT on tourism. The EU has released a discussion document inviting stakeholders to comment on possible options, with proposals expected in the latter half of 2023. The proposals include considering which services should be included in the TOMS scheme, where the TOMS margin should be taxed, and whether the margin should be calculated per transaction or annually. These changes could potentially affect UK operators if they are brought into the scope of EU VAT.
Source vatnav.com
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