Germany’s Federal Ministry of Finance will defer VAT on German holidays until 2027.
This news is a victory for tour operators who sell Germany as a destination, because VAT would have inflated the prices of holidays for anyone buying packages outside the EU.
Not only would it have made German travel expensive, it would also require tour operators to register and file tax returns, which they previously did not have to do.
According to travelweekly.com, VAT has been postponed annually since 2021. The latest postponement came in January this year following a further review.
During a webinar update, the European Tour Operator Association (ETOA) said the Federal Ministry of Finance had likely decided to defer VAT until 2027, largely because law reforms were expected in the near future.
“We think that they’re postponing it, not purely out of the practical problems of implementing it, but also because the European Commission has said that they’re about to reform these laws,” said ETOA CEO, Tom Jenkins on a July 24 webinar call with members.
He said Croatia’s decision to implement the tax, despite Germany’s deferral, was a problem because tax operators currently selling Croatia externally still needed to be registered for VAT in Croatia to account for the tax.
