Joint Letter – Tourism & Mobility Players Voice Concern over Proposed VAT Platform Rules

Jointly with 6 other leading European tourism and mobility organisations, eu travel tech has addressed EU Finance Ministers to voiceconcerns regarding the platform rules propsed under the VAT in the digital age package.

On 8 December, 2022 the European Commission published its draft proposal on “VAT in the digital age,” kicking off the special legislative procedure scrutinised by the Council of the European Union to decide on future VAT rules at the EU level.

The package (ViDA) aims to update the EU’s VAT rules in light of developments in the platform economy. Among its contents is the so-called deemed supplier regime, which would oblige short-term rental accommodation and passenger #transport platforms to account for, collect and remit the VAT on behalf of providers (i.e. private individuals, enterprises operating under simplified VAT and VAT-exempted enterprises). This would increase prices for consumers by around 20% and in many cases (e.g. simplified VAT schemes) generate double taxation.

Ahead of an EU Finance Minister debate on this topic on 16 June, a group of organisations representing European homeowners, short-term accommodation, and passenger transport platforms, as well as small travel and tourism operators have written a public letter to EU governments to express their concerns.

We believe the deemed supplier regime is a solution in search of a problem, which will unfairly disadvantage services sold through platforms, lead to double taxation, hurt private providers seeking to supplement their income, make it nearly impossible for SME platforms to implement, and raise prices across the board in the travel sector.

We urge Member States to rethink the current approach and conduct a thorough analysis of the deemed supplier regime’s impact, before moving ahead with the negotiations in the Council.

Please find the full letter below.