The European Commission decided on Thursday 6 June, to refer Austria to the EU Court of Justice for failure to comply with the special VAT rules applicable to travel agencies. This decision follows a formal notice sent in July 2014 and a reasoned opinion issued in June 2018 by the institution against this Member State requesting an amendment of its VAT legislation.
A press release explains that under the special VAT regime applicable to travel agencies, VAT should only be applied to margins on sales of travel services to consumers. In return, however, travel agencies cannot deduct the VAT they pay when they purchase services from other companies. The reason for the referral is that Austria does not correctly apply this rule, as it currently excludes travel services sold to other companies from the scheme. Such an exclusion is considered likely to distort competition, according to the Commission.
Austria also infringes the VAT Directive (2006/112/EC) by calculating the VAT to be paid by travel agents on an overall turnover during a tax period, even though the case law of the EU Court of Justice (C-189/11) clearly states that the tax base must be defined for each individual sale and must not be calculated on the basis of a sales group. (Original version in French by Martin Molko – intern)