Context: exemption versus standstill provision
Under the VAT Directive, services supplied by travel agents are, in principle, exempt from VAT where they relate to travel outside the EU (Article 309 VAT Directive). However, under the standstill provision (Article 370 VAT Directive), Member States were allowed to continue taxing transactions that were already subject to VAT on 1 January 1978.
Belgium made use of this option.
Belgium made use of this option.
In the Jetair case (2014), the Court of Justice had already confirmed that Belgium could continue to tax such services without infringing EU law.
The key issue: the 2000 legislative reform
By Royal Decree of 28 December 1999 (effective as from 1 January 2000), the Belgian rules applicable to travel agents were substantially revised to align them with the Directive (following a complaint by the European Commission). The previous presumption that travel agents acted as agents on behalf of the traveller was abolished and replaced by a system under which they are deemed to act in their own name. At the same time, the explicit exclusion from the VAT exemption for travel services outside the EU was removed.
This removal resulted from the fact that the provision had become redundant, as the earlier exclusion was linked to the former qualification of travel agents as intermediaries.
The TUI group (note that Jetair has since been integrated into TUI) argued that, as a result, the exemption had become applicable again and sought a refund of VAT previously paid on travel outside the EU.
General Court: implicit taxation is sufficient
The General Court rejected that argument:
- The standstill provision does not require an explicit derogation in national legislation.
- It is sufficient that the legal framework implicitly confirms that the services remain taxable. Belgian law still did not provide for an exemption.
- A subsequent legislative amendment does not terminate the standstill, provided that the system essentially maintains the same taxation and does not reflect a different underlying rationale.
On that basis, Belgium was entitled to continue taxing the services at issue.
Current situation: exemption since 1 May 2014
It should be noted, however, that the discussion is now largely of historical relevance.
Since 1 May 2014, Belgium has aligned its legislation with the VAT Directive by introducing an explicit exemption in Article 41(2bis) of the Belgian VAT Code. This provision stipulates that:
- travel agency services are exempt where the underlying transactions take place outside the EU;
- for mixed travel, only the portion relating to services performed outside the EU is exempt.
Conclusion
The judgment of 25 March 2026 confirms that Belgium validly applied its historical derogation, even in the absence of an explicit legislative provision after 2000. Together with Jetair, this largely closes the debate for the past.
From a practical perspective, the key takeaway is that Belgium has, since 2014, effectively applied the exemption in line with the VAT Directive.
More broadly, the judgment is also of legal significance. It illustrates that, when assessing transitional and standstill provisions, the Court of Justice and the General Court focus less on the formal wording of national legislation and more on its substantive continuity. The decisive question is not whether a derogation is explicitly restated, but whether the national regime continues, in essence, to produce the same taxable outcome.