Germany VAT and TOMS Guide for Travel Businesses | German Tax Rules Explained

Complete overview of German VAT, travel rates, TOMS margin rules, and compliance requirements for inbound and outbound operators.

Detailed VAT and TOMS guide for travel agents, tour operators, and DMCs working in Germany. Understand VAT rates, place of supply, accommodation rules, event services, and margin calculations. Includes TOMS treatment, compliance obligations, and VAT reclaim guidance.

Germany – VAT and TOMS for Travel Businesses

Modern VAT system introduced: 1968 (Umsatzsteuer)
Standard VAT rate: 19 percent
Reduced rates: 7 percent and 0 percent (specific cases)
Authority: Bundeszentralamt für Steuern (BZSt) and local Finanzämter

Germany has one of Europe’s most structured VAT regimes, with clear definitions for accommodation, transport, cultural services, and event activities. Germany applies the EU Tour Operator Margin Scheme (TOMS), enforces strict invoice formatting rules, and is introducing mandatory B2B e-invoicing between 2025 and 2027.

Germany is a core destination for conferences, exhibitions, trade fairs, river cruises, and cultural tourism, which means foreign travel agents, tour operators, and DMCs frequently create German VAT exposure.

VAT treatment of travel and hospitality in Germany

Germany uses a combination of standard and reduced VAT rates across the tourism sector.

Accommodation

Accommodation is taxed at the 7 percent reduced VAT rate, including:

• hotel stays
• guest houses
• holiday apartments
• campsites

However, many items routinely sold by hotels attract 19 percent, including:

• breakfast (if itemised separately)
• spa and wellness services
• parking
• meeting rooms and event space
• mini-bar items
• business services

If breakfast is included without separate pricing, the hotel must allocate revenue between 7 and 19 percent.

Food and beverage

Germany applies:

• 7 percent on restaurant food
• 19 percent on all drinks (alcoholic and non-alcoholic)
• 19 percent on catering where off-premises preparation dominates
• 7 percent on qualifying food ingredients under strict rules

Hotel half-board and full-board packages require revenue allocation if alcoholic beverages or premium services are included.

Passenger transport

Passenger transport VAT varies:

• domestic rail: 7 percent
• domestic bus/coach: 19 percent
• domestic flights: 19 percent
• international passenger transport: exempt or outside the scope

River and canal cruises often require allocation depending on the route.

Tours, guides, cultural services, attractions

Germany distinguishes between cultural services eligible for reduced rates and commercial services taxed at standard rate.

• museum entry: 7 percent
• guided tours: 19 percent
• theatre, concert, classical events: 7 percent if run by qualifying institutions
• amusement parks, commercial attractions, boat tours: 19 percent
• event services, staging, AV, corporate hospitality: 19 percent

DMC and event organiser services

German DMCs typically charge 19 percent VAT for their fees, itinerary design, event production, and incentive programmes unless the service falls under TOMS.

Place of supply rules

Germany follows EU place-of-supply principles:

Accommodation is taxed where the property is located. Reselling German hotels as principal triggers German VAT.

Event services (trade fairs, conferences, exhibitions, corporate meetings) are taxed in Germany for both B2B and B2C.

Cultural, entertainment, and educational services are taxed where performed.

Restaurant and catering services are taxed where physically carried out.

Passenger transport depends on distance travelled within Germany or internationally.

For foreign travel companies, this means that most Germany-based travel services trigger German VAT unless TOMS applies.

Germany and the Tour Operator Margin Scheme (TOMS)

Germany applies TOMS under the same core EU principles but enforces them more strictly than many countries.

When TOMS applies

TOMS applies when:

• the supplier buys in travel services
• the supplier acts as principal, not as agent
• the services are consumed within the EU
• the travel is part of a package or single component resold
• the business is established in Germany or another EU country, or is a non-EU business acting as principal

What is taxed

Under TOMS:

• only the margin is subject to VAT
• input VAT on bought-in travel services is not recoverable
• foreign businesses operating exclusively under TOMS do not need to register for German VAT

Exclusions from TOMS

TOMS does not apply to:

• intermediary services
• pure event fees
• planning and consulting services
• non-EU travel (margin may be zero rated)
• activities where the supplier itemises VAT
• business travel arrangements where invoicing may follow normal VAT rules

VAT rate on TOMS margin

Always 19 percent, regardless of the underlying component VAT rates.

Zero-rated margin

Travel outside the EU may qualify for zero rating if the entire itinerary occurs outside the EU.

German invoicing requirements (Rechnungen)

Invoices in Germany must contain:

• supplier name, address, VAT number
• customer VAT number for intra-EU B2B supplies
• consecutive invoice number
• date of issue and date of supply
• description of services
• VAT rate and VAT amount
• location of service
• reverse-charge reference where applicable
• TOMS reference: “Sonderregelung für Reisebüros”

Invoices missing required elements may invalidate VAT recovery for the customer and trigger penalties.

Invoices under TOMS

• no VAT is shown
• invoice must reference the margin scheme
• customer cannot deduct VAT
• invoice must not imply VAT recovery is possible

Mandatory e-invoicing in Germany (2025–2027)

Germany has legislated mandatory electronic invoicing for all domestic B2B transactions, with phased implementation:

• 2025 – all businesses must be able to receive e-invoices
• 2026–2027 – mandatory issuing of e-invoices for most B2B transactions
• paper and PDF invoices will no longer be compliant for B2B

Germany will adopt structured EN-16931 formats, similar to Italy’s e-fattura but less rigid.

Who must comply

Any business with a German VAT registration, including foreign entities with:

• a fixed establishment in Germany
• local VAT liabilities outside TOMS
• B2B supplies subject to German VAT

Impact on travel businesses

• hotels, venues, attractions will issue structured e-invoices
• DMCs must issue e-invoices for German B2B clients
• foreign suppliers registered for VAT must adopt e-invoicing
• TOMS invoices may not require structured XML but require reporting in certain cases
• B2C transactions are generally excluded

This will significantly change how foreign companies operate in Germany.

VAT registration for foreign suppliers

Foreign travel companies may need German VAT registration if they:

• supply taxable event services in Germany
• resell accommodation as principal
• supply catering, restaurant, or cultural services in Germany
• operate German-based tours or activities
• have a fixed establishment in Germany
• supply services not covered by TOMS

Reverse charge may apply for certain B2B services, but not for:

• accommodation
• event services
• local passenger transport
• restaurant or catering services
• cultural services

Non-EU companies must appoint a fiscal representative unless exempt under Germany’s bilateral agreements.

VAT reclaim position

VAT incurred in Germany may be refundable to:

• EU businesses through the EU 8th Directive
• non-EU businesses through the EU 13th Directive

Refund success requires:

• compliant German invoices
• correct VAT indicator and rate
• evidence of business use
• consistent documentation
• correct expense categorisation
• timely submissions

VAT on TOMS-related costs is not recoverable.

Full details are available on our VAT Reclaim page.

Antravia helps

Antravia supports travel companies with:

• Germany VAT classification and rate review
• TOMS applicability and margin modelling
• mandatory e-invoicing preparation
• VAT registration and fiscal representative review
• event VAT guidance
• multi-country itinerary analysis
• reclaim feasibility for non-TOMS costs
• identifying and preventing VAT leakage

Not based in Germany but looking for German VAT Reclaim? Click here

Not sure where to start? Contact Antravia for a free Consultation

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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