Tax and tourism
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TOURISM TAX RATES
Find day and overnight tax rates
Over 50+ European destinations
ETOA on Tax and Tourism
- Member-only database of Tourism Taxes per destination
- Tour Operators Margin Scheme (TOMS)
- VAT in a Digital Age (ViDa)
Taxation and Tourism in Europe
Taxation plays a critical role in shaping tourism competitiveness and business viability while the added value of intermediation is often poorly understood. The EU is at a disadvantage for three reasons: it taxes tourism exports, the price of holidays to non-EU destinations is VAT-free, and local taxes have increased significantly. Some European authorities are seeking to collect a tax on B2C sales of European product made outside the EU.
Tourism is especially sensitive to the cumulative impact of taxes. Analysis by the OECD in 2014 showed that higher tourism charges can reduce competitiveness. Visitors are price-sensitive and can easily choose alternative destinations, while businesses can relocate or invest elsewhere.
Reform is complex. For example, change in primary EU tax law requires unanimity among all member states. Local tourism taxes can be justified where revenues are clearly reinvested into infrastructure and services that benefit both residents and visitors. Without visible benefits, they risk undermining long-term competitiveness. Simplicity, transparency, and careful design are essential to avoid unnecessary administrative and cost burdens.
ETOA’s Policy Objectives
ETOA supports a tax framework that:
- Encourages value creation and strengthens Europe’s tourism exports
- Ensures reciprocity, where revenues fund services that benefit residents and visitors, including support for the green transition
- Is simple to comply with and avoids unnecessary complexity
- Is developed through meaningful consultation and introduced with sufficient notice (ideally 18–24 months)
A balanced and well-designed approach to taxation is essential to maintain Europe’s position as a leading global destination while supporting a sustainable and competitive tourism sector.
- Lobbying and participation in expert groups on legislative review
- Expert advice through seminars, online briefings and helpline
- Research and reports on policy impact
- (2024) – Reform of VAT and TOMS – Session 1 and VAT Country Reports (Uk, Switzerland, Italy, Germany, Croatia) – Session 2
- ETOA webinars
- (2019) Tax and tourism: a destination management problem? – ETOA’s in-depth review of how tourism taxation affects destination competitiveness and policy decisions.
- (2019) September 2019 press release highlighting some examples of good practice by destinations.
VAT in a Digital Age package (ViDa)
The VAT in a Digital Age (ViDA) package is an initiative by the European Commission to modernize and simplify how Value Added Tax (VAT) is reported and collected in the EU, especially in the context of digital services, cross-border trade, and online platforms. It builds on previous VAT reforms but focuses heavily on digitalisation and efficiency.
After the 2024 elections and the appointment of Commissioners-designate, two main regulatory proposals that had previously stalled are likely to progress.
While the VAT package for travel and tourism was problematic due to the diversity of measures it proposes – not just on TOMS VAT, but also passenger transport and duty free, the consultation launched in July 2025 removes duty free from scope.
The EU ‘VAT in a Digital Age‘ package (ViDA) made progress following a meeting of ECOFIN on 5th November 2024.
ViDA aims to:
- Set common standards for Digital Reporting Requirements (DRR)
- Require platforms to collect VAT via the Deemed Supplier Regime (DSR)
- Expand the One Stop Shop (OSS) to reduce multiple VAT registrations and expand use of reverse charge for B2B transactions
While digitalisation promises efficiency gains, the DSR could create challenges for small service providers, platforms, and national tax authorities. In November 2023, ETOA and industry partners urged caution on its adoption.
Further debate is inevitable as ViDA continues its progress through the EU’s legislative process. Remaining Member State objections were overcome late October 2024 through various compromises which will delay implementation. A phased rollout is now expected from 2027 to 2035. For more details, see EY expert summary.
ViDA was covered at an indirect taxation Drop In on 13th November 2023: recording and presentation available here.
Destination taxes
ETOA monitors approx. 50 destinations which levy a tourist tax on day or overnight visitors. The database of tax rates is a member-only service requiring members to use their website log-in details to view. Information on ETOA’s lobbying position can be found clicking on ‘Read more’ below. ETOA also contributes to partner’s work on this topic, e.g. Group NAO’s ‘Tourism taxes by design.’
Tour Operators Margin Scheme (TOMS)
This is a ‘special scheme’ that applies to agents and operators packaging and selling EU tourism product. It remains an intelligent simplification: it shares tax benefit between destination and operator’s country of establishment; it minimises the need for multiple registration; it is relatively easy to administer. However, it still taxes exports to non-EU clients, partly because the service of packaging is not seen as something clients enjoy in their home country. In July 2025, a consultation on the scheme’s reform was launched.
German VAT
The Federal finance ministry has postponed its proposal to change its treatment of non-EU B2C sales of German tourism product until 1st January 2027. The change is not required by Brussels: it is a unilateral action which risks causing wider disruption as well as harm to Germany inbound. Together with our partners, we continue to argue against it.
