This initiative aims to address outdated regulations that create distortions in the EU single market and hinder sector competitiveness. 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.

Focus Areas

The consultation seeks feedback on two core issues:

1. 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.
2. 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.

How to Participate

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 will remain open for 12 weeks, with additional targeted discussions planned, including meetings with Member State representatives and business groups.

Why It Matters

The travel and tourism sectors contribute around 10% to the EU’s GDP and employ millions, predominantly SMEs. Modernising VAT rules is critical to ensuring fair competition, reducing administrative burdens, and aligning taxation with digitalisation and sustainability goals. The outcomes of this consultation will inform an envisaged legislative proposal by the end of 2026.

Next Steps

A summary of the public consultation will be published, and results will be integrated into an impact assessment and a legislative proposal. Stakeholder input will be vital to shaping fair, efficient, and future-proof VAT rules for the sector.

Further information

• Link to the public consultation: VAT package for travel and tourism
• VAT special schemes: VAT Special Schemes