The mobility package adopted by the Commission on 29 November has received mixed reactions. ECTAA welcomes the measures to improve clarity and speed up B2B refunds. However, the obligation to limit prepayments of packages is expected to drive up prices, fragilize traders, and offer minimal benefits to consumers, potentially excluding the most vulnerable from this protective scheme and leading them towards cheaper yet unprotected alternatives. Furthermore, the proposal is criticized for lacking the essential tools required to effectively address large-scale crises.
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 EU to decide on future VAT rules at the EU level.
The VAT in the digital age package 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 accommodation and passenger transport platforms to account for, collect and remit the VAT on behalf of providers. 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.
Recognising that tourism has been “badly hit” by the COVID-19 crisis, ECTAA is pleased to see that Tourism Ministers are eager to use the EU Recovery Fund for tourism. ECTAA also welcomes their support for a “harmonized solution” for refunding travel packages, including vouchers (link).