- EU Travel & Tourism VAT Reform (2026): The European Commission is reviewing three key areas of VAT in the travel sector: the Tour Operators Margin Scheme (TOMS), VAT rules for passenger air transport, and the exemption for goods supplied to non-EU travelers, with a reform package for TOMS expected by the end of 2026.
- TOMS Reform Focus: The upcoming TOMS reforms aim to address competitive distortions, particularly in B2B supplies, clarify the place of taxation for non-EU travel agents, and refine margin calculation methods to ensure fairness, consistency, and easier compliance while tackling varied Member State applications.
- Passenger Transport VAT Challenges: The current system’s reliance on distance travelled for taxation is a major issue, with discussions on alternative place of supply rules. Additionally, widespread zero-rating for international air and maritime transport, compared to reduced rates for other transport modes, leads to low VAT revenue and potential distortions.
Source vatcalc
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