Tax for the Travel Industry

Taxation in the travel industry is rarely straightforward. Every jurisdiction defines “travel services” differently, and the treatment of commissions, packages, or accommodation can change from one border to the next. A travel business that operates seamlessly for clients often faces a patchwork of corporate tax, VAT, GST, and withholding obligations behind the scenes.

Through Antravia Advisory, we examine how these rules apply across key markets, the United States, United Kingdom, European Union, and United Arab Emirates. Each system presents unique challenges, from U.S. sales tax nexus and U.K. TOMS compliance to EU VAT harmonisation and the UAE’s new corporate tax regime.

Antravia's goal is to give travel companies a clear understanding of their global tax footprint and practical insight into how to stay compliant while protecting profitability.

Tax in the United States

The United States remains one of the most complex tax environments for travel businesses. While the federal corporate income tax is relatively straightforward, most of the complexity lies at state level, where sales and use taxes differ dramatically by jurisdiction. Unlike VAT or GST systems elsewhere, U.S. sales tax is imposed at the state or city level and often applies to hotel stays, car rentals, and travel services physically rendered in that location.

Travel agents and operators face specific issues around nexus (the level of business activity that creates a local tax obligation) and reseller certificates, especially when packaging products across multiple states. Hotels, meanwhile, must navigate occupancy taxes, local tourism levies, and state filing variations.

For cross-border operators, the U.S. tax system also involves withholding rules on payments to foreign suppliers and beneficial ownership reporting (BOI) requirements under FinCEN. Understanding these obligations is essential for any travel business trading with or through the United States.

Taxes for Travel Agents: The Complete 2025 Guide

Complete 2025 U.S. tax guide for travel agents. Learn how to handle estimated tax payments, self-employment tax, sales tax nexus, and BOI reporting. Reduce penalties, maximize deductions, and stay compliant with expert advice from Antravia.

Travel Advisor Tax Deductions: What you can actually Write Off

Not sure what you can deduct as a travel advisor? This guide breaks down real, legal business expenses, from host fees to FAM trips, and how to stay compliant.

U.S Sales Tax Rules for International Travel Agents

Selling to U.S. travelers from abroad? Learn when and how U.S. sales tax applies to international travel sellers, and how to stay compliant without overpaying.

Can you deduct Destination Trips? What the IRS Really Says

Travel agents and hoteliers often ask if scouting destinations can be deducted as business travel. Learn what the IRS actually allows, including the primary purpose test and documentation rules for international trips.

State Sales Tax and BOI Changes: What 2025 means for U.S. Travel Advisors

Nebraska and Louisiana show how state sales taxes could reshape travel-advisor fees, while new BOI rules ease federal reporting. Here’s what to watch in 2025.

BOI Reporting for Travel Advisors in 2025: Compliance Guide

New Beneficial Ownership Information (BOI) reporting rules apply to U.S. travel advisors and agencies in 2025. Antravia explains who must file, deadlines, and how to stay compliant without risking fines. Link

U.S. Hotel Taxes: What Travel Agents must tell Clients

U.S. hotels often add local taxes, occupancy charges, and resort fees at check-in. Learn what travel advisors must explain to clients to avoid surprises and protect trust. Link

Tax in the United Kingdom

The U.K. travel industry operates within one of the most distinctive tax frameworks in the world. The Tour Operator Margin Scheme (TOMS) fundamentally alters how VAT is calculated for agents and tour operators, applying VAT only to the profit margin rather than to total turnover. This system, though beneficial, requires precise record-keeping and reporting to HMRC.

Hotels and hospitality businesses charge standard VAT rates on accommodation and related services, while also managing corporation tax on profits and PAYE/NIC obligations for staff. For companies trading cross-border, withholding tax and double tax treaty relief may also come into play.

With Making Tax Digital (MTD) now mandatory for VAT, accurate digital record-keeping and compatible accounting software are essential. The U.K. remains a stable yet tightly regulated tax environment where compliance discipline directly protects profit margins

VAT Reclaim for Travel Agents and Hotels | How to recover what you’re owed

Many travel agents and hotels miss out on reclaiming VAT from foreign trips and supplier invoices. Antravia explains when VAT is recoverable, how to file claims correctly, and why proper VAT management improves cash flow and margins.. Link

Indirect Tax Risks for Travel Agents and OTAs

VAT is more than reclaim rules. Travel agents and OTAs face hidden VAT liabilities when selling packages, earning commissions, or misclassifying contracts. Learn how to protect your margins. Link

Business Structure for UK Travel Agents

Sole trader, partnership, or limited company? Learn which structure works best for UK travel agents and tour operators, and how it affects tax, VAT, and compliance.. Link

Accounting for UK Travel Agents – TOMS VAT, ATOL, ABTA & more

Discover how UK travel agents can stay compliant and profitable in 2025. Learn about TOMS VAT, ATOL trust accounts, ABTA rules, FX risk, and selling travel into the U.S., with the latest industry data and practical accounting strategies. Link

VAT for UK Travel Agents and Tour Operators: What you need to know about TOMS

Understand how VAT and the Tour Operators’ Margin Scheme (TOMS) affect UK travel agents. Learn how to stay compliant and protect your margins.. Link

How to Stay HMRC-Ready: Compliance Tips for Travel and Hospitality Businesses

Practical compliance tips for UK travel and hospitality businesses. Learn how to stay HMRC-ready and avoid penalties with structured financial controls. Link

Tax in Europe

Across Europe, travel taxation is dominated by the EU VAT Directive, but each member state enforces it differently. The result is a patchwork of VAT rates, exemptions, and local tourism taxes that affect every tour operator, OTA, and hotel group trading across borders.

The Tour Operator Margin Scheme (TOMS) applies in many EU jurisdictions but with national variations, creating additional complexity for multi-country operators. Meanwhile, Digital Services Taxes (DST) and the DAC7 reporting framework are reshaping how platforms declare income from European consumers.

Hotels face rising local tourist levies, often linked to sustainability and destination funding, while travel businesses must also consider corporate tax exposure when establishing European subsidiaries or representative offices.

In short, the EU system demands both precision and adaptability and understanding how VAT interacts with corporate structures is key to sustainable profitability.

VAT Reclaim for Travel Agents and Hotels | How to recover what you’re owed

Many travel agents and hotels miss out on reclaiming VAT from foreign trips and supplier invoices. Antravia explains when VAT is recoverable, how to file claims correctly, and why proper VAT management improves cash flow and margins.. Link

Indirect Tax Risks for Travel Agents and OTAs

VAT is more than reclaim rules. Travel agents and OTAs face hidden VAT liabilities when selling packages, earning commissions, or misclassifying contracts. Learn how to protect your margins. Link

EU Digital Services Law: What Travel Agents and Hotels need to know

The EU’s Digital Services Act and new tech taxes could reshape travel. Learn how agents, hotels, and OTAs may face hidden costs, platform risks, and compliance traps.. Link

Tax in United Arab Emirates

The UAE has transformed from a tax-free jurisdiction into a modern, rules-based environment. Since 2018, Value Added Tax (VAT) has applied at 5% across most goods and services, including hotel accommodation, tour services, and events. In 2023, the UAE introduced a 9% Corporate Tax for most businesses, aligning its system with OECD standards while maintaining certain exemptions for free zones.

Travel companies must now register for corporate tax, assess their Permanent Establishment (PE) status, and comply with transfer pricing documentation requirements.

Hotels and DMCs also face strict rules on tax invoicing, VAT recovery, and foreign tour operator treatment.

Additionally, entities engaged in travel or hospitality often fall under the Economic Substance Regulations (ESR), which test whether a business has adequate operations and decision-making within the UAE. While still competitive, the UAE tax landscape now demands structured compliance and professional oversight to remain risk-free.

Understanding Tax in the UAE - From Zero Tax to Corporate Reality

A detailed look at UAE corporate tax, free zone benefits, VAT, ESR, transfer pricing, and compliance timelines for businesses operating in the Emirates. Link

Economic Substance Regulations (ESR) in the UAE: What Small Businesses need to know

Understand UAE Economic Substance Regulations. Learn which activities qualify, what reports are required, and how to stay compliant with Antravia AE. Link

VAT Registration and Filing in the UAE: Step-by-Step Guide for 2025

A complete 2025 guide to UAE VAT. Learn when to register, how to file returns, and common VAT mistakes businesses should avoid. Link