ECJ: the special VAT scheme for travel agents is not limited to sales of travel services to travellers

Michael Wukoschitz's picture

The European Commission brought a series of infringement proceedings against eight Member States for failure to comply with their obligations under the directive 2006/112/EC on the common system of value added tax. The actions relate to the special scheme for travel agents.

The Commission considered that the special scheme for travel agents is applicable only to sales of travel services to travellers. It complained that the Member States Czech Republic, Finland, France, Greece, Italy, Poland and Portugal authorised the application of that scheme to sales of travel services to any type of customer. The Court acknowledged that there are particularly significant differences between the language versions of the directive, some using the term ‘traveller’ and/or the term ‘customer’, at times varying the use of those terms from one provision to another. The provisions at issue therefore must be interpreted by reference to the general scheme and purpose of the rules of which it forms part. In that regard, the Court considered that an approach consisting in applying the special scheme to any type of customer was the best way of achieving the aims of the scheme. It enables travel agents to benefit from simplified rules regardless of the type of customer to whom they provide their services, while encouraging a fair distribution of receipts between the Member States. Thus, ECJ held that the provisions of the special scheme were not limited to sales of travel services to travellers and entirely dismissed the Commission’s actions against Poland, Italy, the Czech Republic, Greece, France, Finland and Portugal.

The ECJ also dismissed the Commission’s action against Spain in so far as it complains that Spain, like the other seven Member States, authorised the application of the special scheme to sales of travel services to any type of customer. However, with regard to Spain the Commission had claimed that the Spanish legislation was incompatible with EU law, in so far as it excluded from the special scheme sales of travel services organised by wholesale agents but carried out by retail agents. The ECJ considered that complaint to be justified, since such an exclusion from the scope of the special scheme was not provided for in the directive.

Source: ECJ press release 120/13 of Sep. 26, 2013

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