VAT for online travel platforms: ViDA changes

From 1 July 2028, some platforms will become responsible for charging, collecting and paying Value Added Tax (VAT) where the underlying supplier does not do so. Member States can delay the deemed-supplier measures until 1 January 2030.

The rules can affect a UK-based platform even though the UK is no longer part of the EU VAT system. If your platform facilitates accommodation or road passenger transport supplied within the EU, you will need to understand which transactions are in scope, what supplier information you must collect and whether your systems can apply the correct VAT treatment in each relevant country.

Understanding VAT for online travel platforms is already important to compliance and profitability. ViDA adds another possible role to the existing distinction between a principal, an undisclosed agent and a disclosed agent: the platform may also become a deemed supplier for particular transactions.

Why your role determines the current VAT treatment

The starting point is the capacity in which your business acts. Contracts, booking terms, customer communications and the practical operation of the platform all help determine the answer.

If your business buys in and resells travel services as a principal, or acts as an undisclosed agent in its own name, the sale may fall within the Tour Operators’ Margin Scheme (TOMS). For a UK-established business applying UK TOMS, VAT is generally due on the margin where the travel is enjoyed in the UK and the margin is zero-rated where it relates to travel enjoyed outside the UK. Overseas obligations can still arise under local rules and the position varies between EU Member States.

A disclosed agent operates differently. The underlying travel provider makes the supply to the customer, while the platform accounts for VAT on its commission where required. For a UK-established platform, the place-of-supply rules often mean that no UK VAT is due on commission charged to an overseas business customer, or on certain commission connected with overseas travel. The precise treatment depends on the contractual and commercial facts.

Establishing the capacity in which you act is therefore essential. ViDA does not remove this analysis. Instead, it changes the outcome for some disclosed-agent transactions involving EU short-term accommodation and passenger transport by road.

What is changing under ViDA?

The EU formally adopted the ViDA package on 11 March 2025 and is introducing it in phases through to 2035. The platform-economy measures cover platforms that facilitate:

• Short-term accommodation rental within the EU, defined for these rules as an uninterrupted rental to the same person for no more than 30 nights
• Passenger transport by road within the EU

These rules apply by reference to the underlying EU supply, not simply where the platform is established. A business based in the UK or another non-EU country can therefore fall within scope.

The measures focus on transactions where the underlying provider does not charge the VAT due, for example because the provider is a private individual or a small business. In those circumstances, the platform may be treated as if it bought the service from the provider and sold it to the customer itself. As the deemed supplier, the platform must determine the relevant VAT treatment, collect the VAT and report and pay it to the appropriate tax authority.

The platform-economy rules are scheduled to apply from 1 July 2028, although each Member State can delay the deemed-supplier measure until 1 January 2030. Platforms should not assume that every EU market will follow the same start date. The timetable will need to form part of the implementation plan.

When will an online travel platform become a deemed supplier?

The new rules are not intended to make a platform liable for VAT on every transaction it supports. They target platforms that facilitate the supply through an electronic interface, such as a marketplace, portal or similar service.

A platform that allows customers and suppliers to enter into a transaction through its interface is more likely to be within scope than a business that only advertises a service or redirects the customer to the supplier’s website. The detailed analysis will depend on how the platform influences the transaction, including its role in the booking and payment process.

Even where a platform facilitates the supply, the deemed-supplier rule will not normally apply if the underlying provider gives the platform a VAT identification number for the Member State where the supply takes place and declares that it will charge the VAT due. This creates an important operational requirement: the platform must be able to collect, verify and monitor supplier VAT information and retain evidence supporting the treatment used.

Supplier status can change. A provider may register for VAT, deregister or supply services in several countries. Your onboarding process cannot therefore be a one-off exercise. It needs clear ownership, reliable validation and periodic review.

What UK travel platforms need to prepare for

The greatest challenge may not be interpreting the legislation. It may be building the data, contracts and governance needed to apply the rules consistently across a high volume of transactions.

An implementation review should consider whether your business can:

• Identify the capacity in which it acts for each revenue stream and transaction type
• Determine whether a supply is short-term accommodation or passenger transport by road within the EU
• Collect the supplier’s VAT number and declaration for the correct Member State
• Validate supplier details and identify changes in status
• Apply the correct VAT rate and place-of-supply treatment in the relevant jurisdiction
• Issue appropriate customer documentation and retain supporting records
• Report and pay VAT through the relevant registration or One Stop Shop route where available
• Provide transaction data where the platform is not itself liable to remit the VAT

The extension of the One Stop Shop may reduce the need for multiple local registrations in some cases, but platforms will still need to assess which transactions and obligations it covers. A registration solution does not replace the need for accurate tax determination and evidence at transaction level.

ViDA has wider commercial implications

ViDA changes who pays the VAT, but its effect reaches beyond the VAT return. Supplier onboarding procedures and contracts may need to explain what information the provider must supply, who is responsible for updating it and how any tax liability will be allocated.

Platforms should also consider pricing and margin. If a supplier has not allowed for VAT in the price presented through the platform, a deemed-supplier liability could affect the amount retained by the supplier, the amount charged to the customer or the platform’s own commercial return. The business will need a consistent approach to gross and net pricing, cancellations, refunds and adjustments.

Governance is equally important. Tax, finance, legal, commercial, product and technology teams may all own part of the process. Clear decision-making and change controls will help ensure that commercial developments do not create gaps in the VAT treatment.

How will ViDA interact with TOMS?

Travel businesses often use several operating models at the same time. Your business may act as principal for some sales, as a disclosed agent for others and as a deemed supplier for a further group of transactions.

ViDA is designed so that a transaction for which a platform is treated as a deemed supplier does not also fall within the EU special margin scheme for travel agents. However, other revenue streams may remain subject to TOMS or the normal agency rules. A single business could therefore need to manage three distinct VAT treatments:

• TOMS for qualifying travel services supplied as principal or undisclosed agent
• Normal VAT rules for disclosed-agent commission
• ViDA deemed-supplier rules for qualifying EU accommodation and road passenger transport transactions

The correct treatment may differ between suppliers using the same platform. Mapping each revenue stream, supplier type and jurisdiction will help you identify which regime applies and where the platform needs a different system or control response.

What should online travel platforms do now?

Although the earliest implementation date is July 2028, platforms may need significant lead time to change supplier terms, onboarding journeys, tax engines, booking systems and reporting processes. Early preparation will also make it easier to respond as individual Member States confirm whether they will use the later January 2030 start date.

Start by asking:

• Do we have a documented view of when we act as principal, undisclosed agent, disclosed agent or deemed supplier?
• Which EU accommodation and road transport transactions could fall within the new rules?
• Can we collect, validate and monitor supplier VAT details by Member State?
• Can our systems change the VAT treatment when a supplier’s status changes?
• Do our contracts clearly allocate responsibility for information, VAT and errors?
• Who owns the implementation programme across tax, legal, product, technology and finance?

Businesses that review their operating models and data requirements now will be better placed to implement the rules without disrupting the customer or supplier experience.

How Blick Rothenberg can help

Blick Rothenberg’s VAT specialists can help you map your platform’s revenue streams, assess the interaction between TOMS, agency rules and ViDA, review supplier onboarding and data requirements, and design a practical implementation plan. If you would like to discuss how the new rules could affect your business, please contact our VAT team.

Sources

European Commission: VAT in the Digital Age
Council Directive (EU) 2025/516
HMRC: Tour Operators’ Margin Scheme (VAT Notice 709/5)