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25 February 2021 | We have added two new pages related to tax: one on Tour Operators Margin Scheme (TOMS), the other on recent changes of treatment of German VAT.

Are you non-EU based and do you buy tourism services in Germany? If yes, please help us illustrate potential impact by completing the Germany VAT impact survey July 2021. All responses are confidential. For more detail on the proposed changes, click here.


How tourism is taxed is the most influential factor on business viability. 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.

The cumulative effect of tax is critical. The increase in devolved tax-raising powers through overnight taxes and access charges was noted as a significant factor in competitiveness by the OECD in 2014. Visitors typically do not vote and they are an easy source of revenue. They do notice both price and service level, and they have a choice.

The Tour Operators Margin Scheme (TOMS) 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, and provides a competitive advantage to non-EU businesses selling EU product. Relocation is often not open to small businesses on whose success tourism’s job generation depends. There is very little volume in retail sales of EU travel product to non-EU consumers.

For more information on overnight and day taxes, click here.

ETOA’s policy objectives

  • Sales to non-EU clients to be VAT-free
  • Tax matched by reciprocal benefit enjoyed by residents and visitors
  • Ease of compliance, with better consultation and notice of change

What we are doing

  • Lobbying and participation in expert group on legislative review
  • Expert advice through seminars, online briefings and helpline
  • Research and reports

Tax reform is complex. At an EU level, significant regulatory change requires unanimity among all member states. Tax on tourism makes sense if it improves infrastructure and service. Looking after and making accessible Europe’s cultural and natural heritage requires funding. Taxation without benefit to the taxpayer may bring short-term relief to hard-pressed budgets, but it will cause long-term competitive harm.


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Tax and tourism: a destination management problem? February 2019

Position paper giving European perspective in response to proposed new tourism tax in Scotland. Also mentions Amsterdam, Barcelona, Edinburgh, Florence, Rome and Paris.

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