The most important taxation matters dealt with by ECTAA concern:
Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (Former 6th VAT Directive, 77/388/EEC)
Council Directive 2006/112/EC is a recast of the 6th VAT Directive of 17 May 1977 on the harmonization of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment (77/388/EEC). It is the main body of European VAT legislation.
Articles 306-310 of Council Directive 2006/112/EC (former Article 26 of the 6th VAT Directive) provides a special VAT scheme for travel service providers, the so-called margin taxation scheme. Under the special margin scheme all transactions performed by the travel service providers in respect of a single travel package are treated as a single supply of services for VAT purposes, taxable in his own Member State. He has no right to deduct VAT on supplies made to him, but on the other hand he is only taxed on the profit margin realized on the supply of the travel package.
The Court of Justice of the European Communities has ruled in a number of instances on the interpretation of the various provisions of the margin taxation scheme, notably:
Other Court rulings relevant for travel service providers but not directly linked to the margin taxation scheme:
Proposal for a Council Directive amending Directive 77/388/EEC as regards the special scheme for travel agents, COM(2002) 64 final
The objective of this Directive proposal is to ensure a more uniform application of the margin taxation scheme by extending the scope of the special scheme to cover the supplies of travel packages to all clients and to abolish the various existing derogations. The proposal also aims at eliminating the distortions of competition from non-EU established tour operators, who currently do not have to comply with the VAT obligations.
[ View ECTAA position paper ]
Directive proposal amending Directive 77/388/EEC as regards the place of supply of services, COM(2003) 822 final In light of the increasing amount of remotely provided services, the Commission proposes to change the place of taxation rules for certain services to ensure that the place of taxation and the place of actual consumption are the same. Some changes are foreseen for tourism services, such as intermediary services in B2B supplies, restaurant and catering services, short-term leasing of transport services, services consumed onboard ships, aircrafts and trains, etc.
[ View ECTAA response to Commission consultation ]
Directive proposal amending Directive 77/388/EEC with a view to simplifying value added tax obligations, COM(2004) 728 final
With a view to simplifying the measures aimed at easing the burden of VAT compliance on taxable persons who have no establishment in the Member State where they are carrying out activities, the Commission proposes a simplification measure allowing a trader to fulfill all his VAT obligations for EU-wide activities in the Member State in which he is established. Traders would be able to use a single VAT number for all supplies made throughout Europe and to make VAT declarations to a single electronic portal.
Council Directive 2005/92/EC of 12 December 2005 amending Directive 77/388/EEC with regard to the length of time during which the minimum standard rate of VAT is to be applied
Directive 2005/92/EC fixes the minimum standard rate of VAT applicable from 1 January 2006 to 31 December 2010 at 15%. [ View VAT rates in the EU Member States ]
Commission staff working paper ‘A possible contribution based on airline tickets as a new source of financing development’, SEC(2005) 1067
The European Commission staff working paper contains an analysis of how a solidarity contribution on airline tickets might be used by EU Member States as a source of development aid in order to help achieving the Millennium Development Goals.