"Holidays outside the EU to become cheaper"

Belgian tour operators are looking forward to a new bill that will abolish VAT on the profits they are making on their (package) holidays. A proposal by Finance Minister Koen Geens has the support of key ministers, and could make organised holidays outside the EU up to 3.78 percent cheaper.

At present, Belgian tour operators have to pay a VAT of 21 percent on the profits they are making. As this profit margin is estimated at 18 percent, a quick calculation learns that tour operators will save 3.78 percent in VAT. In theory, this means that a holiday worth 1,000 euros could become 37.8 euros cheaper. However, it is not clear whether tour operators will pass on this benefit for 100 percent to their customers.

Tour operators welcome the measure. "At present, we are the only EU country where tour operators have to pay VAT on trips outside the EU. This is unfair competition", says Claude Pérignon of the federation of Belgian tour operators.

Koen Geens' proposal could become law even before the elections. It has the support of federal key ministers, and should go the Chamber Commission this week. However, it is not clear when the new rules would eventually come into force.