The Contents of Highlights & Insights on European Taxation, Issue 7, 2026

Please find below a selection of articles published this month (July 2026) in Highlights & Insights on European Taxation, plus one freely accessible article.

Highlights & Insights on European Taxation (H&I) is a publication by Wolters Kluwer Nederland BV.

The journal offers extensive information on all recent developments in European Taxation in the area of direct taxation and state aid, VAT, customs and excises, and environmental taxes.

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Year 2026, no. 7      

TABLE OF CONTENTS 

INDIRECT TAXATION, CASE LAW

– J-GmbH (Application sélective du taux réduit de TVA) (C-409/24, C-410/24 and C-411/24). Limits on reduced VAT-rates for ancillary hotel services. Court of Justice

(comments by Luca Sabbi) (H&I 2026/211)

– TUI Belgium (T-221/25). Interpretation of VAT treatment of travel agent services under EU derogations. General Court

(comments by Ine Lejeune) (H&I 2026/210)

– Stellantis Portugal (C-603/24). Intra-group transfer price adjustments and VAT do not constitute a taxable supply without a direct service relationship and reciprocal obligations. Court of Justice

(comments by Simon Cornielje) (H&I 2026/209)

– Cavert (T-444/25). VAT exemptions for supplies by members of a VAT group. General Court

(comments by Madeleine Merkx) (H&I 2026/185)

FREE ARTICLE

– TUI Belgium (T-221/25). Interpretation of VAT treatment of travel agent services under EU derogations. General Court

(comments by Ine Lejeune) (H&I 2026/210)

Legal certainty versus implicit legislation

The central difficulty in the judgment lies in the coexistence of two conflicting propositions. On the one hand, in paragraph 35, the General Court of the European Union (hereinafter: ‘GC’) expressly recognises that the principle of legal certainty, as a general principle of EU law, requires the chosen legislative technique to be clear and precise with regard to the legal situations to which it applies. It acknowledges that the Belgian VAT Code has lacked an explicit standstill clause for non-EU travel services since 1 January 2000, and that the continued taxation of these services was only implicitly implied by the VAT Code’s structure (TUI Belgium, T‑221/25, paragraphs 35, 36-38 and 43).

Paragraph 40 provides the analytical framework. Further to the Court’s case law, a national measure adopted after the relevant date is not automatically excluded from the derogation for that reason alone. It may continue to apply to a provision that is similar to the previous legislation in its main aspects, or that merely relaxes or removes an obstacle to exercising rights and freedoms under EU law contained in the previous legislation. However, a legal provision based on a different underlying principle from that of the previous legislation, which introduces new procedures, cannot be equated with the legal provision in force at the relevant time. This test is decisive, as it focuses not only on the form of drafting, but also on continuity of substance, continuity of rationale, and continuity of procedure (TUI Belgium, T‑221/25, paragraph 40).

Paragraph 42 demonstrates that the Belgian legislative reform is not merely technical. Following the EU Commission’s infringement procedure, Belgium had to amend its own VAT Code. From 1 January 2000 onwards, travel agents were no longer acting as commissionaires of the traveller but instead acted in their own name as agents when organizing and selling trips using goods and services supplied by others, in accordance with Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (hereinafter: the ‘VAT Directive’).

The second subparagraph of Article 41(2) of the Belgian VAT Code, which expressly excluded travel agencies providing non-EU travel services from the VAT exemption, was repealed on 1 January 2000. Article 41(1) of the Belgian VAT code became applicable. It provided for the exemption of non-EU travel services in accordance with Articles 309 and 153 of the VAT Directive. Both provisions have direct effect. Nevertheless, the GC ruled that these services remained subject to VAT on 1 January 2000, since there was no provision exempting them from VAT (TUI Belgium, T‑221/25, paragraphs 42 and 43).

The GC did not itself definitively conclude that the old and new Belgian VAT regimes were identical in their fundamental aspects. It was stated that they appeared to produce identical results, did not appear to rest on a different underlying principle and did not appear to have introduced different procedures.

However, it was immediately added that this is for the referring court to determine. The Belgian Hof van Cassatie must therefore determine whether the post-2000 system genuinely maintained the same substantive tax position as the pre-2000 system (TUI Belgium, T‑221/25, paragraph 47)

The fundamental question, therefore, is whether a ‘new approach’ has been established since 1 January 2000, when the definition of travel services was revised, and the explicit exclusion of non-EU travel services from the VAT exemption was abolished (CJ 23 April 2009, C‑460/07 Puffer, ECLI:EU:C:2009:254, paragraphs 85-87; CJ 20 September 2018, C‑685/16 EV, ECLI:EU:C:2018:743, paragraph 75)

The GC did not state that implicit taxation is always sufficient. It was determined that the repeal of an explicit provision and its replacement by provisions from which continued taxation follows only implicitly do not have to be regarded, by that fact alone, as a departure from legislation that is identical in its main points and based on the same underlying principle. The judgment therefore provides the Belgian Supreme Court with the possibility of concluding, depending on its interpretation of the Belgian VAT Code, that the 2000 reform did in fact alter the fundamental principle or procedural architecture of the regime. (TUI Belgium, T‑221/25, paragraph 48)

Application of Article 1 of Protocol No. 1 to the European Convention on Human Rights and Article 17 of the Charter

In accordance with Article 1 of Protocol No. 1 to the European Convention on Human Rights (ECHR), the interference with property through taxation is lawful on the condition that it is based on a legal provision that satisfies the requirements of accessibility, precision and foreseeability. The qualitative requirements outlined above pertain to both the wording of the law itself and the manner in which it is interpreted and applied by the relevant authorities in tax matters. It is evident that the aforementioned standards also contain the level of protection under Article 17 of the ECHR in situations governed by EU law.

In Shchokin v Ukraine (ECtHR 14 October 2010, Shchokin v Ukraine, nos. 23759/03 and 37943/06, ECLI:CE:ECHR:2010:1014JUD002375903) the European Court of Human Rights (ECtHR) ruled that the absence of a clear and unambiguous legal basis for the levy violated Article 1 of Protocol No. 1. In Serkov v Ukraine (ECtHR 7 July 2011, Serkov v Ukraine, no. 39766/05, ECLI:CE:ECHR:2011:0707JUD003976605), it was established that tax legislation must be accessible, precise and foreseeable. The court determined that a lack of foreseeability constitutes sufficient grounds to undermine the quality of the law. This case law supports the argument that an implied tax, reconstructed only through a combined reading, is not in accordance with Convention standards.

Interpretation of ‘implicit’ legislation: in dubio contra fiscum

In the event of uncertainty regarding implicit legislation, the principle of in dubio contra fiscum, often translated as ‘in the case of doubt, it must be decided in favour of the taxpayer’, applies.

The aforementioned adagium is recognised by the Court of Justice of the European Union (hereinafter: the ‘CJ’). In Deli Ostrich (CJ 27 October 2011, C‑559/10 Deli Ostrich, ECLI:EU:C:2011:708), the Court ruled that unclear fiscal regulations must be interpreted in favour of the taxpayer. Furthermore, in SIAT (CJ 5 July 2012, C‑318/10 SIAT, ECLI:EU:C:2012:415, paragraphs 57-59), the Court decided that rules that fail to meet the requirement of legal certainty cannot be imposed on the taxpayer. In U.I (Représentant en douane indirect) (CJ 12 May 2022, C‑714/20 U.I (Représentant en douane indirect), ECLI:EU:C:2022:374) and Belgian Association of Tax Lawyers and Others (CJ 29 July 2024, C‑623/22 Belgian Association of Tax Lawyers and Others, ECLI:EU:C:2024:639) cases, it was confirmed that fiscal obligations with adverse consequences for the taxpayer must be clear and precise. This is in accordance with Article 17 and Article 52, paragraph 3 of the ECHR. The case law is legally binding on national courts.

The ECtHR has also explicitly declared the adagium as binding. In Serkov v Ukraine (ECtHR 7 July 2011, Serkov v Ukraine, no. 39766/05, ECLI:CE:ECHR:2011:0707JUD003976605), that Court expressly held that where tax legislation is ambiguous, the tax authorities must adopt the interpretation most favourable to the taxpayer. Shchokin v Ukraine (ECtHR 14 October 2010, Shchokin v Ukraine, nos. 23759/03 and 37943/06, ECLI:CE:ECHR:2010:1014JUD002375903) points in the same direction.

The principle of legal certainty in EU law necessitates a clear and precise legal basis for tax burdens, especially in cases where such burdens directly impact the taxpayer’s patrimonial position. The GC itself cites that principle in paragraph 35.

Furthermore, Articles 16, 17 and 41 of the ECHR substantiate the assertion that a taxpayer should be cognisant in advance of the circumstances in which and the rationale behind the imposition of VAT. A levy that is only implied by the absence of an exemption, as opposed to being explicitly charged, may consequently be contested on the grounds of its insufficient predictability.

It is also noteworthy that the GC has seemingly set aside a significant line of prior CJ’s case law, which required an explicit legal basis in circumstances involving tax obligations or other adverse consequences for the taxpayer. In tax law, several notable cases highlight the importance of clear, precise tax rules. For instance, Gebroeders van Es Douane Agenten BV v Inspecteur der Invoerrechten en Accijnzen (CJ 13 February 1996, C‑143/93 Gebroeders van Es Douane Agenten BV v Inspecteur der Invoerrechten en Accijnzen, ECLI:EU:C:1996:45) emphasizes the need for unambiguous tax legislation, while SIAT (C‑318/10) addresses the issue of foreseeability in situations where adverse consequences may arise. T‑2 (CJ 22 February 2018, C‑396/16 T‑2, ECLI:EU:C:2018:109) underscores the importance of clear awareness of obligations, while U.I (Représentant en douane indirect) (C‑714/20) clarifies the requirement for explicit and unequivocal determination of VAT liability. Furthermore, Fiat Chrysler Finance Europe v Commission (CJ 8 November 2022, C‑885/19 and C‑898/19 Fiat Chrysler Finance Europe v Commission, ECLI:EU:C:2022:859) and Związek Gmin Zagłębia Miedziowego (CJ 8 May 2019, C‑566/17 Związek Gmin Zagłębia Miedziowego, ECLI:EU:C:2019:390), highlight the principle that the essential elements of taxation must be established by law. Finally, Foreningen C and Others (CJ 19 December 2024, C‑573/22 Foreningen C and Others, ECLI:EU:C:2024:1043) underscores the principle that a standstill regime can be maintained only when it remains essentially unchanged.

Together, these judgments suggest that imposing implicit taxes conflicts with the CJ’s established case law, including judgments on VAT, on legal certainty and fiscal legality.

The GC’s decision in TUI Belgium (T‑221/25) can be criticised on two grounds. Firstly, it may be considered to endorse implicit legislation, a precedent that could create legal uncertainty. Member States may use this judgment to defend ‘bad’ transpositions of the VAT Directive and/or the implementing regulations, to the detriment of taxpayers. Secondly, there is the question of whether the Court applied the relevant CJ’s case law sufficiently. From an institutional perspective, it is therefore pertinent to ask whether this judgment may have ramifications for the unity and consistency of EU law. This prompts the next question: was the First Advocate General under an obligation to submit the case for review by the CJ in accordance with the review mechanism outlined in Article 256(3) TFEU?

Economic consequences

The exemption for non-EU travel is more than a technical matter. The inability to exempt non-EU travel services has directly impacted Belgian travel businesses financially. When Belgian VAT is applied to supplies for travel outside the Union, it reduces the margin and profitability of these Belgian companies. This creates significant competitive distortion because travel services provided outside the EU by businesses in other Member States or elsewhere are not subject to VAT and can fully deduct any input VAT. These conditions are more advantageous than those for Belgian operators. Therefore, this issue matters not only legally but also affects the competitive position of Belgian firms operating in a global cross-border market.

This strengthens the argument that legality and foreseeability standards should be applied strictly, because the disputed tax treatment produces direct financial consequences in a competitive EU and international market, especially from the year 2000 onwards, with the rise of the internet; the Belgian providers had to compete also with EU and non-EU travel service providers offering non-EU travel services online and through platforms.

The judgment is also notable for what it does not address. It does not engage with Article 17 of the ECHR and Article 16 of the ECHR or the ECHR’s quality-of-law cases, even though those sources offer a structured framework for testing whether implicit taxation can satisfy legality requirements. That omission matters because the core legal objection to the judgment is not simply that the Belgian legislature changed the text, but that, after the reform, the legal basis for taxation by an unpaid tax collector was removed in an area where legal certainty should be at its strongest.

Overall, the GC’s judgment resolves only part of the controversy. It answers the abstract EU law question by holding that an express standstill provision is not required and that a legislative amendment does not fall outside the derogation merely because continued taxation – if this is found by the Supreme Court to exist – is only implicit. But the decisive issues remain with the Belgian Supreme Court, which will have to provide an answer to the following questions:

Does the replacement of an express derogating rule with an implicit legislative structure remain sufficiently ‘identical in its main points’ to the pre-existing regime, particularly where the underlying legal framework of the travel agent has changed?

Is the acceptance of implicit taxation compatible with the CJ’s own case law on legal certainty, fiscal legality and the requirement that adverse tax obligations be clearly laid down by law? And what about in dubio contra fiscum?

The author’s position is that, since 1 January 2000, the legal characterization of the travel agent has shifted from that of a commissionaire acting on behalf of the traveller to that of an agent acting in its own name. The responsibility for determining whether this alteration has affected the ‘main points’ and underlying rationale of the regime, and consequently, whether it is based on a different approach and whether it has succeeded in removing it from the standstill clause, lies with the referring court. Given the GC’s reliance on legal certainty (paragraph 35) and the requirements flowing from Article 1 of Protocol No. 1 ECHR and Articles 16, 17 and 52(3) of the ECHR, the Belgian Hof van Cassatie should resolve any remaining doubt as to implicit taxation in dubio contra fiscum, that is, in favour of the taxpayer.

Ine Lejeune