Proposed tax on Germany vacations is dropped for 2023

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The old town in Bamberg, Germany.
The old town in Bamberg, Germany. Photo Credit: Nicole Edenedo

Berlin's value-added tax on Germany vacations sold outside the EU did not go into effect as expected on Jan. 1 -- a victory for tour operators and travel agencies that opposed the tax. 

In addition to making Germany vacations more expensive, the tax would have required tour operators to register and file tax returns in Germany, which they previously had not been required to do.

European tour operator trade group ETOA said in a statement that after a series of meetings between German states and the federal finance ministry, it was decided that the tax would be "suspended for one year pending further review."

The ETOA and the U.S. Tour Operators Association have been staunch and vocal opponents of the VAT since it was first scheduled to go into effect in 2021. Both organizations had questioned what they called a lack of communication from German officials as to how the tax would be implemented, collected and enforced.

The ETOA said in its statement that while the proposed changes for 2023 have been postponed for another 12 months, the "implications for product delivered in 2024 and beyond are not yet known."

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