New GC VAT Case – T-221/25 (TUI Belgium) – Facts & Questions – VAT Rules for Travel Services

Summary

Prejudicial Questions to EU Court: The Belgian court has referred questions to the Court of Justice of the European Union regarding the necessity of explicit legal provisions for VAT exemptions on travel services outside the EU, particularly in light of changes made after the implementation of Directive 77/388/EEG.
Impact of Legislative Changes: The court is evaluating whether the removal of an explicit provision that taxed travel agencies for services outside the EU, replaced with implicit regulations, constitutes a significant change from previous legislation that could affect compliance with EU law.
Ongoing VAT Obligations: The case underscores the complexities of VAT regulations for travel agencies in Belgium, highlighting the need for clarity on whether recent legal adjustments align with EU directives and whether they maintain the intended exemptions for travel services.

Facts and background

Background of the Dispute: The case involves TUI Belgium NV and its associated companies, which are part of the Belgian VAT group TRAVEL4YOU. They are seeking a refund of VAT that they believe was incorrectly charged on travel services provided for trips outside the European Union between January 1, 2000, and April 30, 2014.
Claim for VAT Refund: The plaintiffs argue that, since January 1, 2000, there has been a legal basis to exempt travel services for destinations outside the EU from VAT. They claim that modifications made to the Belgian VAT law removed the explicit provisions that allowed for the taxation of these services, thus making them exempt.
Changes to Belgian VAT Law: In the lead-up to the implementation of Directive 77/388/EEC (now replaced by Directive 2006/112/EC), the Belgian government amended the VAT law, particularly removing provisions that previously exempted travel agencies’ services for trips outside the EU. This amendment effectively subjected these services to VAT, which the plaintiffs contest.
Court of Appeal Decision: The Court of Appeal in Ghent ruled that TUI’s services, as a travel agency, remained taxable from January 1, 2000, and rejected their claims for VAT refunds, determining that the legal changes did not alter the taxability of these services.
Referral to the ECJ: The Belgian court is uncertain whether an explicit legal provision is necessary for the continued taxation of travel services outside the EU under the standstill clause in the VAT directive. The court seeks clarification from the Court of Justice of the European Union (CJEU) regarding the interpretation of the relevant articles of the VAT directive and the implications of the changes in Belgian law.
Legal Implications: The case raises important questions about the application of EU VAT law, the concept of “standstill” provisions that allow member states to maintain existing tax practices, and the relationship between national law changes and compliance with EU directives.

Questions

Is an explicit legal provision required for the application of the standstill provision in Article 28(3)(a) and (4) of Directive 77/388/EEC (now Article 370 of Directive 2006/112/EC) that allows for the continued taxation of travel services provided by travel agencies for trips outside the EU?
Should Article 28(3)(a) and (4) and Annex E, point 15, of Directive 77/388/EEC (now Article 370 and Annex X, part A, point 4 of Directive 2006/112/EC) be interpreted to mean that a modification made to existing legislation after the implementation of Directive 77/388/EEC, which removes the explicit legal provision that previously subjected travel agency services for trips outside the EU to VAT, constitutes legislation that is not “substantially identical” to the earlier legislation and is based on a different principle?

Articles discussed of the EU VAT Directive 2006/112/EC

Article 306: This article pertains to the special scheme for travel agencies, detailing how they should be treated for VAT purposes.
Article 309: This article discusses exemptions related to travel services provided by travel agencies, specifically in terms of VAT.
Article 370: This article relates to the “standstill” provision, allowing member states to continue taxing certain services under conditions that existed before the directive’s implementation.

ECJ cases referred to

ECJ 24 januari 2012, C-282/10: This case discusses the principle of the precedence of EU law over national law.
ECJ 11 november 2015, C-505/14: This case addresses the application of EU law principles in the context of VAT.
ECJ 24 juni 2019, C-573/17: This case relates to the interpretation of VAT regulations and their application.
ECJ 11 september 2003, C-155/01: This case involves the interpretation of the standstill provisions and their application in member states.
ECJ 22 december 2008, C-414/07: This case discusses the implications of VAT law and compliance issues.
ECJ 23 april 2009, C-460/07: This case addresses the relationship between national regulations and EU directives.
ECJ 18 juli 2013, C-124/12: This case examines the application of VAT rules in specific circumstances.
ECJ 2 mei 2019, C-225/18: This case discusses the interpretation and enforcement of VAT regulations in the EU.
ECJ 8 januari 2002, C-409/99: This case relates to the interpretation of the VAT directive and its implementation by member states.
ECJ 22 december 2010, C-438/09: This case addresses VAT compliance and the application of penalties.
ECJ 18 april 2013, C-565/11: This case discusses the treatment of VAT in relation to various transactions and the obligations of taxpayers.
ECJ 15 juli 1964, C-6/64: This case deals with the principles of VAT exemptions and the scope of application within EU law.
ECJ 9 maart 1978, C-106/77: This case addresses the conditions under which certain services may be exempt from VAT.
ECJ 29 april 1999, C-136/97: This case examines the application of VAT exemptions and how they relate to the provision of services across borders.
ECJ 14 juni 2001, C-40/00: This case discusses the compatibility of national VAT rules with EU directives.
ECJ 12 juni 2008, C-462/05: This case focuses on the VAT treatment of specific goods and services and the obligations of EU member states.
ECJ 3 maart 2020, C-482/18: This case explores the implications of VAT rules on cross-border transactions and compliance requirements.