- The European Commission has not proposed a general increase in tourism VAT.
- The EU Travel and Tourism VAT Reform Package is expected before end of 2026.
- The package targets the Tour Operators Margin Scheme and passenger transport rules.
- Ireland reduced its food and hospitality VAT rate to 9pc from 1 July 2026.
- HOTREC warned that rising local tourism taxes risk costing nearly 1m jobs.
The European Commission has not proposed a direct general increase in VAT rates for tourism and hospitality. Individual EU member states maintain sovereignty over their own VAT rates under EU directives. Confusion around an EU-suggested VAT increase typically stems from the EU Travel and Tourism VAT Reform Package and industry warnings against localised tax hikes.
The European Commission is finalising a legislative proposal expected before the end of 2026 following a public consultation launched in late 2025. The package targets structural distortions including the Tour Operators Margin Scheme and passenger transport harmonisation. The Commission aims to simplify distance-based VAT rules for cross-border travel rather than raising prices.
The HOTREC study warned that rising local tourism taxes and regional VAT adjustments across Europe risk costing nearly 1m jobs. Ireland reduced its VAT rate for food catering and hairdressing from 13.5pc to 9pc effective 1 July 2026. The European Commission’s framework permits member states flexibility to use reduced VAT rates for food and hospitality.
