👉 Always follow the steps in order.
Never jump directly to products or VAT rates.
Overview: the 3-step logic
Who is the customer? (Step 1)
Where does the travel take place? (Step 2)
Which VAT regime applies? (Step 3)
Only after Step 1 and Step 2 do we decide how VAT is calculated.
STEP 1 — Customer type & invoicing address
Start by identifying who the customer is and where they are established.
Question to ask
Who is the invoice issued to, and where are they established?
If the customer is a company
Customer location | VAT outcome (Step 1) |
Company established in the same country as the selling entity (e.g. BE → BE) | VAT applies |
Company established in another EU country | No VAT (reverse charge) |
Company established outside the EU | No VAT |
If the customer is a private individual
Customer location | VAT outcome (Step 1) |
Private individual in the same country as the selling entity | VAT applies |
Private individual in another EU country | VAT applies |
Private individual outside the EU | No VAT (subject to travel scheme rules) |
📌 Important
Step 1 only answers: is the customer in EU VAT scope?
It does not yet decide how VAT is calculated.
Common pitfalls in Step 1
❌ Confusing traveler nationality with invoice recipient
❌ Assuming “company = no VAT” (not true if same country)
❌ Looking at destination instead of customer first
STEP 2 — Destination of the travel service
If VAT applies after Step 1, you must assess where the travel is enjoyed.
Question to ask
Where does the travel take place?
Destination | Result of Step 2 |
Same country as selling entity | VAT applies |
Within the EU | VAT applies |
Outside the EU | No VAT |
📌 Important
Step 2 classifies the destination
It does not yet decide how VAT is calculated
You always proceed to Step 3 after this
Common pitfalls in Step 2
❌ Assuming “outside EU = always no VAT” (depends on Step 3)
❌ Using departure airport instead of where the travel is enjoyed
❌ Skipping Step 2 because Step 1 already “felt clear”
STEP 3 — Which VAT regime applies to this sale?
Only now do we decide how VAT is calculated.
There are three possible regimes:
Packaged travel (margin scheme)
Normal VAT per product
Intermediary / agency fee
Step 3.1 — Is this sold as Packaged Travel?
Key question
Are we selling, in our own name, a single trip that combines two or more travel services?
Travel services include:
Transport (flight, rail, coach, sea)
Accommodation
Car rental
Significant tourist services (excursions, guides, tickets)
If YES → Packaged Travel
→ Go to Step 3.2
If NO
Sold as one or more independent services → go to Step 3.3
Acting only as intermediary → go to Step 3.4
📌 Important
Number of invoice lines does not matter
Multiple passengers does not automatically mean a package
What matters is whether services form the same trip
Step 3.2 — Packaged travel (sold in our own name)
When packaged travel applies:
VAT is not calculated per component
VAT is calculated only on the margin through VAT schemes specific for each country.
VAT depends on where the trip is enjoyed:
Trip (or part) within the EU → VAT due on margin
Trip (or part) outside the EU → margin VAT exempt
📌 Product-specific VAT rules do not apply here.
Step 3.3 — Single travel service(s) (non-package)
This is where product-specific VAT rules apply.
Identify the product type
Product | VAT treatment |
International air passenger transport | Typically VAT exempt |
International rail / sea / coach | Typically VAT exempt |
Hotel / accommodation | VAT taxable (often reduced rate) |
Car rental | VAT taxable (usually standard rate) |
Travel insurance | VAT exempt |
Excursions / guides / tickets | VAT taxable |
Then:
Apply the local VAT rate of the country of supply
Step 3.4 — Intermediary (agency) sale
If we are only arranging the service:
The travel service is between customer and supplier
We are not selling in our own name
Our taxable supply exists only if we charge a fee or commission
VAT treatment:
Apply Step 1 to the fee
Apply Step 2 to determine place of supply
VAT applies only to the fee, not to the travel service
Final checklist for agents
Before confirming VAT, always ask yourself:
Who is the invoice issued to, and where are they established?
Where does the travel actually take place?
Are we selling:
a trip (packaged travel)?
independent services?
or only a service fee?
If you follow the steps in order, VAT will always be correct.
Golden rule to remember
Step 1 decides IF VAT is in scope
Step 2 decides WHERE the travel is enjoyed
Step 3 decides HOW VAT is calculated
If in doubt, do not guess — escalate before invoicing.