EU Commission sues Austria over VAT rules for travel agents

Michael Wukoschitz's picture

The special VAT scheme for travel agents means that VAT should be applied only on the margins made from sales of travel services to consumers. In return, however, travel agents cannot deduct VAT they pay while buying services from other businesses.

The Commission is of the opinion that Austria does not correctly apply this rule, because it excludes travel services sold to other businesses from the scheme which is not allowed under current EU rules, and can lead to a distortion of competition. According to the Commission, Austria also infringes on this provision (VAT Directive, Council Directive 2006/112/EC) by calculating the VAT to be paid by travel agents on an overall turnover within a tax period. EU case law (Commission vs Spain, case C-189/11) clearly states that the taxable amount must be defined for each individual sale, and not calculated on the basis of a group of sales.

The Commission therefore decided to bring the matter before the Court of Justice of the EU.

Source: European Commission press release IP/19/2773 of June 6, 2019