There have been several developments in the operation of the Tour Operators Margin Scheme (TOMS), a VAT margin scheme used by many businesses in the sector.

The European Commission has published its findings following a formal evaluation of the scheme, alongside which both Germany and Croatia have unilaterally changed their own implementations of it.

In Germany, the Ministry of Finance has deferred a recent announcement regarding the application of the TOMS to non-EU businesses. Those businesses are now permitted to continue to make use of it until 31 December 2021, following an initial announcement that prohibited use with effect from 31 December 2020.

In Croatia, Ordinance has been issued by the Minister of Finance confirming that, with effect from 5 January 2021, the TOMS should not be applied by non-EU businesses.

Businesses must now consider the implications of these local changes and the proposed EU-wide reforms on relevant supply chains. It is likely that further change will follow.