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.
02/06/2023 Industry letter to the attention of Didier Reynders, Commissioner for Justice:
Limiting pre-payments for travel packages will not enhance travellers' protection in the EU
As Europeans are preparing for their annual summer break, the European Commission is finalizing its impact assessment on a revised Package Travel Directive, which will have big implications for their travel experiencee in the future.
ECTAA, representing travel agents and tour operators in Europe, welcomes the opportunity given by the European Commission to provide its views on the ViDA package adopted on 8 December 2022, and more specifically the proposed VAT rules for platforms supplying short-term accommodation (and/or transport services), where the underlying supplier does not charge VAT. In short, ECTAA opposes the introduction of the Deemed Supplier Regime (DRS) as it simplifies the VAT requirements of typically smaller ‘untaxed’ accommodation providers and tax collection by Member States, while pushing all the VAT burdens and costs onto platforms, many of whom are small and medium-sized companies. We also consider that the proposed platform rules could benefit from clarification in certain areas.
We – the International Road Transport Union (IRU), the European Travel Agents & Tour Operators in Europe Association (ECTAA), and the European Tourism Association (ETOA) – voice our strong support for an ambitious European Commission proposal on the specific driving and rest time rules for coach tourism drivers. …
Currently, coach tourism drivers are subject to the same rules regarding the organisation of their working and driving times, breaks and rest periods as truck drivers who transport goods. However, the activity of a coach tourism driver differs significantly from other modes of transport in terms of operational and driving patterns. …
The stakeholders include CLIA Europe (cruise lines), ECTAA (European travel agents and tour operators), ETOA (European inbound tourism operators), EU Travel Tech (OTAs, travel tech companies) as well as TTL Net (European tourism tax consultants).
70 public and private travel and tourism organisations propose several amendments to the new EU Digital COVID Certificate Regulation with the aim to secure the freedom of movement across the continent and guarantee harmonised rules when the Certificate is in use.
The European Tourism Manifesto alliance, the voice of the travel and tourism sector in Europe, welcomes the European Commission’s proposal that amends and extends the use of the EU Digital COVID Certificate (EUDCC) to facilitate free movement during and in the aftermath of the COVID-19 pandemic.
“MDMS can be defined as “systems providing information about, inter alia, the location of transport
facilities, schedules, availability and fares, of more than one transport provider, with or without facilities to make reservations, payments or issue tickets” (e.g. route-planners, Mobility as a Service, online ticket vendors, ticket intermediaries”
70 travel and tourism organisations express their support to any effort – based on scientific evidence – to keep protecting and ensuring the freedom of movement and avoid a patchwork of diverging national measures within the EU/EEA as well as internationally
A common and fully aligned approach on the eligibility and timing of booster doses, linked to the continued validity and use of the EU Digital Covid Certificate, is a must.
Given the latest epidemiological developments across Europe, and ahead of the approaching festive season, a broad group of key travel and tourism stakeholders is urging Member States to better coordinate and align their health and travel policy responses to avoid re-imposing restrictions to the freedom of movement across Europe.
November 2021 Reforming Package Travel Law in a post-pandemic world
The travel sector has been greatly hit by the pandemic. In March 2020, travel agents and tour operators have seen an almost complete stop to their activities, while enduring cancellation costs due to the pandemic and uncoordinated, ever changing travel restrictions and advices. Whilst the package holiday delivers the gold standard of protection to travellers, that protection comes at a high cost to travel companies and will be a significant impediment to the survival and growth of existing travel companies and to the entry into the market of new businesses
Covid 19 has had an unprecedented impact on people’s lives and economies. A glimmer of hope surfaced with the development and gradual roll-out of the vaccine programmes. They will provide protection to the most vulnerable population groups and help our health systems better cope with the C19 crisis. However, we cannot wait until all people are vaccinated to be able to travel again. This would shatter the hopes of many people wanting to travel and cripple an entire industry already at the brink of bankruptcy. ECTAA is thus calling on the EU and national decision-makers to prepare an EU roadmap for return to travel in time for spring and summer season. We need to give travellers and the industry a perspective when and under which conditions travel can resume as vaccinations are progressively rolled out.
The undersigned associations, representing the travel and tourism sectors and their workers, are fully supportive of the Commission’s proposed EU coordination framework for travel restrictions.
This framework is a much-needed step in the right direction, providing common criteria for fully aligned risk assessments and the related mapping of EU/EEA countries and the UK. We urgently need this framework to be endorsed and fully implemented by all European States.
...The chaotic situation requires an immediate personal involvement, as President of the European Commission. We are thus urging you make this issue a top priority and calling on you to address this issue directly with the Heads of State and Government....
During the immediate response to the crisis, the European Commission recognised that:
- Tourism revenue had suffered a total collapse, just at the start of the season
- Investment in the sector would not take place - Its ecosystem is dominated by SMEs and micro enterprises
- This is what makes the tourism offer in Europe so diverse, distinctive and appealing
- The losses are cross-cutting in impact, including transport, culture and rural economy
- This crisis is different: demand has been drastically suppressed and travel discouraged
30/04/2020 An EU-wide legal framework with adequate consumer protection for the issuance of state-guaranteed and flexible vouchers is needed to ensure consistency for travellers and address the current liquidity crisis.
EU Travel Tech and ECTAA call for the adoption of an EU-wide legal framework setting out consumer protection in instances where travel providers issue refundable vouchers, achieved through a temporary amendment of relevant EU legislation. Such a change must ensure flexibility on the use of vouchers and be protected against insolvency of the operators.
The entire travel and tourism sector is facing a short-term liquidity crisis following national government instructions to cancel passenger movements by any mode of transport, commencing mid-March. This is part of a complete shutdown of travel and tourism globally, with borders closed and movement restricted
Representing 67 countries and markets worldwide and the voice of the global travel agency community, the World Travel Agents Associations Alliance (WTAAA) is deeply concerned with Covid-19's unprecedented catastrophic impact on the travel industry, compromising the viability of all sectors, including airlines and travel agencies, hotels, tour operators, cruise lines, passenger ground transportation - including rail - and tourist destinations globally
In light of the unprecedented COVID-19 crisis, Europeans are no longer able to travel. Thousands of aircraft in Europe are grounded – requests for ticket refunds are outnumbering new flight bookings, tourism hot spots are empty, and airports across the continent have come to a standstill.
ECTAA & UNI Europe are fully committed to sustaining and supporting European economic activities to the best of their abilities during this unprecedented pandemic crisis. The unavoidable decisions to contain the covid-19 pandemic are severely restricting public life and bringing travel and tourism to an almost complete standstill. Considering that this is a crisis of yet unforeseen dimension since the beginning of the European integration, ...
While the impact of the Covid-19 outbreak cannot yet be assessed, the damages in the travel industry are immense. The Communication published by the European Commission on Friday to mitigate the economic impact of Covid-19, recognized that tourism is amongst the sectors most affected.
The unpredictable and continuous development of the Coronavirus (COVID-19) is a head-on challenge for the world economy, and particularly for the travel industry: restricted mobility is the antonym of travelling; hence the threats for the tourism industry are total.
The loss for the travel industry is already immense. Travel agents and tour operators, as a central part in the tourism value chain, are being squeezed from all sides
The European travel agents and tour operators call upon the “von der Leyen” Commission to work for a competitive, transparent and sustainable travel market
ECTAA considers that the directive proposal does not provide sufficient safeguards to prevent abusive claims and will create an unbalanced environment where the right of the defence is clearly ignored. It is therefore of outmost importance that safeguards are in place to guarantee the right of defence and prevent abuses from claims management companies
A recent study carried out by ETTSA and ECTAA identified five key areas of concerns to the non-airline distribution chain players. Based on interviews with senior representatives of different distribution chain stakeholders, including agents, airlines, and GDSs, the study makes a number of recommendations to improve the effectiveness and efficiency of the IATA Passenger Agency Programme
ECTAA and GEBTA call on the European Commission and Member States to start a dialogue on the revision of the special VAT scheme for travel agents, as provided for in articles 306-310 of the VAT Directive. The provisions are in dire need of revision as they are outdated (from 1977), resulting in major distortions of competition in the market for the supply of travel services.
The Package Travel Directive was adopted in 1990 and was covering most of the holiday market at the time of its adoption. However, Consumer patterns have changed over the last 23 years, and new distribution channels have emerged thanks technological developments and the widespread usage of internet. Today, the European Consumer has access to multiple distribution channels from the classical paper brochure to mobile applications.