EU TOMS Guide: Simplify VAT for Tour Operators | Antravia

EU TOMS Guide: Simplify VAT for Tour Operators | Antravia

The core principle behind TOMS

The Tour Operators Margin Scheme is set out in Articles 306 to 310 of the EU VAT Directive. These articles exist for one reason: to avoid forcing tour operators to register for VAT in every country where accommodation, transport, or other travel services are enjoyed.

Under TOMS, VAT is not charged on the full selling price of a trip. Instead, VAT applies only to the margin, meaning the difference between what the customer pays and the direct costs of the travel services bought in from suppliers. Crucially, that margin is reported through a single VAT registration, not split across multiple countries.

Where VAT registration normally happens

In most cases, a tour operator registers for VAT in just one EU Member State. This is the country where the business is established, meaning where its headquarters or a fixed establishment is located.

All EU travel sales falling under TOMS are then declared on that single VAT return. The country where the hotel is located, where the excursion takes place, or where the transport starts does not create additional VAT registrations under TOMS.

The position for non-EU tour operators

Non-EU businesses, including those based in the United States or the United Kingdom, often assume they must register somewhere in the EU to deal with TOMS. In many cases, this is not correct.

Where a non-EU tour operator has no establishment in the EU, supplies that fall under TOMS are generally treated as outside the scope of EU VAT. That means no EU VAT registration is required for those supplies.

If a non-EU business chooses to establish an EU entity to manage EU sales, the position changes slightly, but the principle remains the same. That EU entity registers for VAT in one Member State only. Common choices include Ireland, Germany, or France, depending on commercial, operational, and regulatory factors. All EU travel sales are then reported through that single registration.

UK travel agent

A UK-established travel agent or tour operator applies UK TOMS and pays VAT on their margin to HM Revenue & Customs.

That is because under TOMS, the place of supply is where the travel agent is established.
Pre-Brexit EU travel: The margin was standard-rated for UK VAT. Post-Brexit non-UK travel: The supply is zero-rated (outside the scope of UK VAT) for the margin related to travel enjoyed outside the UK. This means the UK agent still uses the UK TOMS rules and calculates the margin, but the portion related to non-UK travel is zero-rated, meaning they pay no UK VAT on that part of the margin. The principle of the place of supply being the UK establishment remains, but the liability is now zero.

See - Tour Operators' Margin Scheme (VAT Notice 709/5)

U.S. travel agent

A U.S.-established travel agent with no EU or UK establishment is in a different legal position.

Their TOMS-type supply is outside the scope of EU and UK VAT, because VAT is a territorial tax and the place of supply under TOMS follows the supplier’s establishment.

Therefore, If a travel agent is based in the United States and has no establishment in the European Union, the Tour Operators Margin Scheme generally does not require any EU VAT registration at all. Under EU VAT law, TOMS applies to EU-established travel agents and tour operators who sell travel services in their own name and use EU suppliers. Where the supplier is a non-EU business with no fixed establishment in the EU, those supplies are normally treated as outside the scope of EU VAT, even if the travel itself takes place within Europe. In practical terms, a U.S. travel agent packaging European hotels, transport, or excursions does not register for TOMS, does not file EU VAT returns, and does not charge EU VAT on the margin, provided all contracting, invoicing, and business establishment remain outside the EU. The position only changes if the U.S. business creates an EU entity or fixed establishment to handle EU sales, in which case that EU entity registers for VAT in a single Member State and applies TOMS through that registration.

So, should you “just set up in the U.S.” to avoid VAT?

This is the critical misunderstanding. You cannot choose your VAT position by picking a country on paper. EU and UK VAT law looks at economic reality, not incorporation alone. If any of the following are true, the structure collapses:

• You have staff, management, or decision-making in the UK or EU
• Contracts are negotiated or concluded from the UK or EU
• You operate through an EU or UK entity, branch, or fixed establishment
• The U.S. company is acting as a conduit for an EU business

In those cases, tax authorities will say the effective establishment is in the UK or EU, and TOMS applies there regardless of where the company is registered.

VAT is designed as a destination-based consumption tax, but TOMS is a simplification scheme. The EU chose establishment-based taxation for TOMS to avoid 27 registrations, not to give non-EU businesses a loophole.

The EU has openly acknowledged this tension for years, which is why proposals periodically surface to tax third-country travel services differently. But until the law changes, establishment still drives the outcome. Germany, for example, issued a decree to exclude non-EU companies without an EU establishment from applying TOMS, potentially forcing them to register and account for VAT under general rules. This is a current point of contention and review by the EU Commission.

See references below for mroe info.

No such thing as a “TOMS application”

Another common misconception is that there is a separate TOMS approval process. In practice, there is not.

You register for standard VAT in the relevant country. TOMS is then applied through how you issue invoices and complete your VAT returns. The scheme is embedded in the reporting mechanics, not in a standalone application form.

VAT registration authorities across the EU

For completeness, and only for situations where registration is genuinely required, below is an overview of where VAT registration is handled in each EU Member State and the local name used for TOMS. The terminology varies, but the legal basis comes from the same EU directive.

Official VAT registration portals by country

Austria

Local TOMS name: Sonderregelung für Reisebüros (Margenbesteuerung)
Authority: Federal Ministry of Finance (Bundesministerium für Finanzen)
Registration portal: FinanzOnline

Belgium

Local TOMS name: Régime particulier des agences de voyages / Reisbureauregeling
Authority: Federal Public Service Finance
Registration portal: FPS Finance Registration

Bulgaria

Local TOMS name: Special scheme for travel services
Authority: National Revenue Agency
Registration portal: NRA e-Services

Croatia

Local TOMS name: Posebni postupak oporezivanja putničkih agencija
Authority: Tax Administration (Porezna uprava)
Registration portal: e-Porezna

Cyprus

Local TOMS name: Tour Operators Margin Scheme
Authority: Tax Department
Registration portal: Tax For All Portal

Czech Republic

Local TOMS name: Zvláštní režim pro cestovní službu
Authority: Financial Administration
Registration portal: Daňový portál

Denmark

Local TOMS name: Særregler for rejsebureauer
Authority: Skattestyrelsen
Registration portal: Virk.dk

Estonia

Local TOMS name: Reisiteenuste erikord
Authority: Tax and Customs Board
Registration portal: e-MTA

Finland

Local TOMS name: Matkatoimistojen marginaaliverotusmenettely
Authority: Tax Administration
Registration portal: OmaVero

France

Local TOMS name: Régime de la marge des agents de voyages
Authority: Direction Générale des Finances Publiques
Registration portal: impots.gouv.fr (professional area)

Germany

Local TOMS name: Sonderregelung für Reisebüros
Authority: Federal Central Tax Office and local Finanzamt
Registration portal: ELSTER

Greece

Local TOMS name: Special regime for travel agencies
Authority: Independent Authority for Public Revenue
Registration portal: AADE Digital Portal

Hungary

Local TOMS name: Special taxation of tour operators
Authority: National Tax and Customs Administration
Registration portal: ONYA

Ireland

Local TOMS name: Tour Operators Margin Scheme
Authority: Revenue Commissioners
Registration portal: Revenue Online Service

Italy

Local TOMS name: Regime speciale delle agenzie di viaggio (Art. 74-ter)
Authority: Agenzia delle Entrate
Registration portal: Agenzia delle Entrate Services

Latvia

Local TOMS name: Special regime for travel agencies and operators
Authority: State Revenue Service
Registration portal: Electronic Declaration System

Lithuania

Local TOMS name: Special taxation scheme for tour operators
Authority: State Tax Inspectorate
Registration portal: Mano VMI

Luxembourg

Local TOMS name: Régime particulier des agences de voyages
Authority: Administration de l’Enregistrement, des Domaines et de la TVA
Registration portal: Guichet.lu

Malta

Local TOMS name: Tour Operators Margin Scheme
Authority: Commissioner for Revenue
Registration portal: CfR Online Services

Netherlands

Local TOMS name: Reisbureauregeling
Authority: Belastingdienst
Registration portal: Belastingdienst for Entrepreneurs

Poland

Local TOMS name: VAT margin procedure for travel agencies
Authority: National Revenue Administration
Registration portal: Podatki.gov.pl

Portugal

Local TOMS name: Regime da margem de lucro das agências de viagens
Authority: Tax and Customs Authority
Registration portal: Portal das Finanças

Romania

Local TOMS name: Special regime for travel agencies
Authority: National Agency for Fiscal Administration
Registration portal: SPV

Slovakia

Local TOMS name: Special VAT scheme for travel agencies
Authority: Financial Administration
Registration portal: Financial Administration Portal

Slovenia

Local TOMS name: Special arrangement for travel agencies
Authority: Financial Administration
Registration portal: eDavki

Spain

Local TOMS name: Régimen especial de las agencias de viajes
Authority: Agencia Tributaria
Registration portal: AEAT Electronic Office

Sweden

Local TOMS name: Vinstmarginalbeskattning för resebyråverksamhet
Authority: Skatteverket
Registration portal: Skatteverket Business Registration

How TOMS is applied in practice

Once registered for VAT in the correct country, TOMS is applied through everyday accounting and reporting.

Invoices for travel packages are issued without showing VAT to the customer. Instead, they include a mandatory reference such as “Margin Scheme – Travel Agents” or the equivalent wording in the local language.

On the VAT return, only the margin is declared. The margin is calculated as the selling price less the direct costs of the travel services purchased. Each Member State has specific boxes on its VAT return for margin or special schemes.

Why getting this right matters

Registering in the wrong place, or registering too many times, creates ongoing compliance costs, inconsistent reporting, and unnecessary audit exposure. More importantly, it usually means the business has misunderstood how TOMS is meant to work.

Understanding the structure first, before registering anywhere, is the single most important step a tour operator can take when dealing with EU VAT.

Official VAT registration portals by EU Member State

(Government sources only)

Austria

Federal Ministry of Finance (Bundesministerium für Finanzen)
Portal: https://finanzonline.bmf.gv.at

Belgium

Federal Public Service Finance (FPS Finance)
Portal: https://finances.belgium.be/en/e-services

Bulgaria

National Revenue Agency (NRA)
Portal: https://portal.nra.bg

Croatia

Tax Administration (Porezna uprava)
Portal: https://e-porezna.porezna-uprava.hr

Cyprus

Tax Department
Portal: https://tfa.mof.gov.cy

Czech Republic

Financial Administration (Finanční správa ČR)
Portal: https://adisspr.mfcr.cz

Denmark

Skattestyrelsen (Danish Tax Agency)
Portal: https://virk.dk

Estonia

Tax and Customs Board (Maksu- ja Tolliamet)
Portal: https://www.emta.ee/eng/e-mta

Finland

Finnish Tax Administration (Verohallinto)
Portal: https://www.vero.fi/en/e-services/omavero

France

Direction Générale des Finances Publiques (DGFiP)
Portal: https://www.impots.gouv.fr/professionnel

Germany

Federal Ministry of Finance / Local Finanzamt
Portal: https://www.elster.de

Greece

Independent Authority for Public Revenue (AADE)
Portal: https://www.aade.gr

Hungary

National Tax and Customs Administration (NAV)
Portal: https://onya.nav.gov.hu

Ireland

Revenue Commissioners
Portal: https://www.ros.ie

Italy

Agenzia delle Entrate
Portal: https://www.agenziaentrate.gov.it

Latvia

State Revenue Service (VID)
Portal: https://eds.vid.gov.lv

Lithuania

State Tax Inspectorate (VMI)
Portal: https://www.vmi.lt/manovmi

Luxembourg

Administration de l’Enregistrement, des Domaines et de la TVA (AED)
Portal: https://guichet.lu

Malta

Office of the Commissioner for Revenue
Portal: https://cfr.gov.mt

Netherlands

Belastingdienst
Portal: https://www.belastingdienst.nl/wps/wcm/connect/en/business

Poland

National Revenue Administration (KAS)
Portal: https://www.podatki.gov.pl

Portugal

Tax and Customs Authority (Autoridade Tributária e Aduaneira)
Portal: https://www.portaldasfinancas.gov.pt

Romania

National Agency for Fiscal Administration (ANAF)
Portal: https://www.anaf.ro
Online filing system: https://www.anaf.ro/SPV

Slovakia

Financial Administration of the Slovak Republic
Portal: https://www.financnasprava.sk

Slovenia

Financial Administration (FURS)
Portal: https://edavki.durs.si

Spain

Agencia Estatal de Administración Tributaria (AEAT)
Portal: https://www.agenciatributaria.gob.es

Sweden

Swedish Tax Agency (Skatteverket)
Portal: https://www.skatteverket.se/business

References

European Union

European Commission. Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, Articles 306–310 (Special scheme for travel agents).
Official Journal of the European Union, L 347, 11 December 2006.
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02006L0112-20240101

European Commission. Explanatory Notes on the VAT rules for travel agents (Special scheme for travel agents).
European Commission, Directorate-General for Taxation and Customs Union.
https://taxation-customs.ec.europa.eu/vat-special-schemes_en

European Commission. VAT Committee – Working Paper No. 836: Issues related to the travel agents’ margin scheme and third-country operators.
European Commission, VAT Committee.
https://circabc.europa.eu/ui/group/0b7b6b8c-7c4d-4f18-b8c4-6b87a4d6f8b2/library

European Commission. Impact Assessment accompanying proposals to modernise VAT for cross-border services, sections discussing competitive distortions between EU and non-EU travel agents.
European Commission Staff Working Document.
https://commission.europa.eu/document/download

Court of Justice of the European Union (CJEU). Case C-190/95 ARO Lease BV v Inspecteur van de Belastingdienst.
Judgment defining the concept of “fixed establishment” for VAT purposes.
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:61995CJ0190

Court of Justice of the European Union (CJEU). Case C-605/12 Welmory sp. z o.o.
Judgment confirming that economic reality and available human and technical resources determine whether a fixed establishment exists.
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:62012CJ0605

United Kingdom

HM Revenue & Customs. VAT Notice 709/5: Tour operators margin scheme.
Official UK guidance on how UK TOMS operates and when VAT on the margin is payable to HMRC.
https://www.gov.uk/government/publications/vat-notice-7095-tour-operators-margin-scheme

HM Revenue & Customs. VAT Notice 700: The VAT Guide, section on place of supply and establishment.
https://www.gov.uk/guidance/vat-guide-notice-700

Disclaimer:
Content published by Antravia is provided for informational purposes only and reflects research, industry analysis, and our professional perspective. It does not constitute legal, tax, or accounting advice. Regulations vary by jurisdiction, and individual circumstances differ. Readers should seek advice from a qualified professional before making decisions that could affect their business.
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