REVISION OF 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.
In 2015 the Commission withdrew the proposal in light of the fact that Member States have not been able to reach an agreement on this proposal. ECTAA considers that it is of paramount importance to revise the taxation scheme, as it is outdated and creates serious distortions of competition in the market for the supply of travel services.
[ View ECTAA position paper and background document ]
[ View ECTAA press release on the ECoJ ruling in the case brought against Spain and other Member States ]
RULES DETERMINING THE PLACE OF TAXATION
Council Directive 2008/8/EC of 12th February 2008 as regards the place of supply of services
The Directive determines the place of supply of services: business-to-business supplies of services are taxed where the customer is situated, rather than where the supplier is located. For business-to-consumer supplies of services, the place of taxation will continue to be where the supplier is established. However, there are a number of exceptions to reflect the principle of taxation at the place of consumption. This includes the majority of travel services.
[ View place of supply rules for travel services]
Council Implementing Regulation 282/2011 laying down implementing measures for Directive 2006/112/EC on the common system of value added tax
The Council implementing Regulation clarifies a number of provisions of the VAT Directive and in particular the place of supply rules which came into force, for the most part, in January 2010 and January 2011. The provisions contained therein concern all service suppliers, but some of them concern specifically suppliers of tourism services, such as clarification of the place of supply of accommodation provided by intermediaries.
Council Implementing Regulation 1042/2013 amending Implementing Regulation 282/2011 as regards the place of supply of services
The Council implementing Regulation provides further clarification on the place of supply rules, among other as regards the rules relating to admission to cultural events and others, travel services booked over the internet, hiring of means of transport and electronically supplied services to customers in restaurants and hotels as well as on means of transport.