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Public consultation seeks input on updating VAT Rules for travel and tourism

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The Commission has launched a public consultation to update VAT rules for the travel and tourism sectors. This is to fix outdated regulations that create market distortions in the EU and limit competitiveness.

Travel and tourism are crucial, making up about 10% of the EU's GDP and employing millions, mainly in SMEs. Updating VAT rules is essential for establishing fair competition, reducing red tape, and aligning taxes with digital and sustainability goals.

Key stakeholders such as member states, SMEs, and the wider public are invited to share their thoughts on changes to the VAT system for travel agents and passenger transport services. The feedback from this consultation will contribute to a legislative proposal expected in 2026.

The consultation focuses on two main areas. The first is the special VAT scheme for travel agents, whose current tax rules are based on their margin and location. This leads to inconsistencies and unfair advantages for non-EU operators. The second area is VAT rules for passenger transport, where taxes are calculated by distance travelled within the EU. This burdens small operators and creates inequalities between transport modes.

Participants can share their feedback through an online questionnaire available in all EU languages and submit position papers through the Commission's “Have Your Say platform”. The consultation will run for 12 weeks, with additional discussions planned, including meetings with representatives and business groups.

Further information on VAT Special Schemes can be found online.

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