EGC VAT Case – T-221/25 (TUI Belgium) – Judgment – Implicit VAT Taxation for Non-EU Travel Services Affirmed

On March 25, 2026, the European General Court issued its decision in the case T-221/25 (TUI Belgium).

Context: Reference for a preliminary ruling — Taxation — Common system of VAT — Transactions subject to VAT — Supply of services for consideration — Exemptions — Standstill clause — Option for Member States to maintain certain taxation on a transitional basis — Article 28(3)(a) and (4) of Sixth Directive 77/388/EEC and Article 370 of Directive 2006/112/EC — Supply of services by travel agents in respect of travel outside the European Union — Annex Point 15 of E to Sixth Directive 77/388 and point 4 of Part A of Annex X to Directive 2006/112 – Subsequent amendment of national legislation – No express derogation from the exemption

Articles discussed of the EU VAT Directive 2006/112/EC

Article 306: This article pertains to the special scheme for travel agencies, detailing how they should be treated for VAT purposes.
Article 309: This article discusses exemptions related to travel services provided by travel agencies, specifically in terms of VAT.
Article 370: This article relates to the “standstill” provision, allowing member states to continue taxing certain services under conditions that existed before the directive’s implementation.

Summary

Background of the Dispute: The case involves TUI Belgium NV and its associated companies, which are part of the Belgian VAT group TRAVEL4YOU. They are seeking a refund of VAT that they believe was incorrectly charged on travel services provided for trips outside the European Union between January 1, 2000, and April 30, 2014.
Claim for VAT Refund: The plaintiffs argue that, since January 1, 2000, there has been a legal basis to exempt travel services for destinations outside the EU from VAT. They claim that modifications made to the Belgian VAT law removed the explicit provisions that allowed for the taxation of these services, thus making them exempt.
Changes to Belgian VAT Law: In the lead-up to the implementation of Directive 77/388/EEC (now replaced by Directive 2006/112/EC), the Belgian government amended the VAT law, particularly removing provisions that previously exempted travel agencies’ services for trips outside the EU. This amendment effectively subjected these services to VAT, which the plaintiffs contest.
Court of Appeal Decision: The Court of Appeal in Ghent ruled that TUI’s services, as a travel agency, remained taxable from January 1, 2000, and rejected their claims for VAT refunds, determining that the legal changes did not alter the taxability of these services.
Referral to the ECJ: The Belgian court is uncertain whether an explicit legal provision is necessary for the continued taxation of travel services outside the EU under the standstill clause in the VAT directive. The court seeks clarification from the Court of Justice of the European Union (CJEU) regarding the interpretation of the relevant articles of the VAT directive and the implications of the changes in Belgian law.
The Court found that:
- This judgment provides significant clarity for Member States utilizing the standstill clause, affirming their flexibility in legislative drafting as long as the underlying tax outcome remains consistent with their historical taxation position.
- The standstill clause does not require an express national legal provision to derogate from the VAT exemption for travel agency services relating to travel outside the EU. The primary condition is that the services were taxed nationally prior to January 1, 1978.A legislative amendment that repeals an express derogation but results in the services remaining implicitly taxable (due to the absence of an exemption) is not, for that reason alone, considered to be substantively different from the previous legislation or based on a different logic, provided its purpose was to align with EU law and it did not alter the taxable nature or scope of the services.

Questions

Is an explicit legal provision required for the application of the standstill provision in Article 28(3)(a) and (4) of Directive 77/388/EEC (now Article 370 of Directive 2006/112/EC) that allows for the continued taxation of travel services provided by travel agencies for trips outside the EU?
Should Article 28(3)(a) and (4) and Annex E, point 15, of Directive 77/388/EEC (now Article 370 and Annex X, part A, point 4 of Directive 2006/112/EC) be interpreted to mean that a modification made to existing legislation after the implementation of Directive 77/388/EEC, which removes the explicit legal provision that previously subjected travel agency services for trips outside the EU to VAT, constitutes legislation that is not “substantially identical” to the earlier legislation and is based on a different principle?

AG Opinion

None

Decision

1. Article 28(3)(a) and (4) of, and point 15 of, Annex E to, Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment, and Article 370 of, and Annex X, point 4 of Part A of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax,

must be interpreted as meaning that:

the derogation which they provide for does not require a provision of national law expressly providing for the derogation from the exemption from value added tax (VAT) for the supply of services by travel agents relating to travel outside the European Union, provided for in Article 26(3) of Directive 77/388 and Article 309 of Directive 2006/112.

(2) Article 28(3)(a) and (4) of, and point 15 of, Annex E to, Directive 77/388 and Article 370 of, and point 4 of Part A of Annex X to, Directive 2006/112,

must be interpreted as meaning that:

a legislative amendment made after the entry into force of Directive 77/388 repealing an express legislative provision under which the supply of services by travel agents in respect of travel outside the European Union was not exempt from VAT, and replacing it with provisions from which it follows only implicitly that such services remain taxable, must not, for that reason alone, be regarded as legislation which is not, in substance, identical to the previous legislation and which is based on a different logic.

Source

Curia

ECJ cases referred to

Judgment of 13 March 2014, Jetair and BTWE Travel4you, C‑599/12, EU:C:2014:144: This case is cited in relation to the interpretation of Article 370 of the VAT Directive and Annex X, Part A, point 4, affirming that granting Member States the option to continue taxing travel agency services for non-EU travel does not violate EU law. It is also referenced concerning the Belgian state’s adherence to Article 309 of the VAT Directive when taxing these services.
Judgment of 4 October 2012, PIGI, C‑550/11, EU:C:2012:614: This case is cited by analogy to support the principle that Member States can choose the most appropriate legislative technique when exercising the faculty granted by EU law.
Judgment of 22 February 2018, T‑2, C‑396/16, EU:C:2018:109: This case is cited in relation to the principle of legal certainty, emphasizing the requirement for clarity and precision in chosen legislative techniques.
Judgment of 23 April 2009, Puffer, C‑460/07, EU:C:2009:254: This case is cited to establish the criteria for determining whether a subsequent national measure can benefit from a derogation, specifically if it is substantially identical to prior legislation or merely reduces an obstacle.
Judgment of 20 September 2018, EV, C‑685/16, EU:C:2018:743: Similar to Puffer, this case is cited to elaborate on the conditions under which a new national measure can be considered “substantially identical” to existing legislation for the purpose of derogations.