Date: 20 September 2021

On August 3, 2021 the Cyprus Tax Tribunal rendered judgment in the Green Greece Go Travel Ltd case (case no. 5/2020E) successfully represented by KPMG CY. The case concerned the application of the Tour Operators’ Margin Scheme (‘TOMS’) for B2B transactions. The Tax Tribunal ruled that the TOMS for B2B transactions should have been applied as from 24 January 2018 (date of issue of Circular 223) and not retrospectively as argued by the Tax Authorities.


On March 2020, the Tax Authorities issued a VAT assessment against Green Greece Go Travel Ltd, after having examined its business records for the period 1/2/2016 – 31/8/2019. The reasoning behind the assessment was that the Taxpayer did not apply the TOMS provisions for relevant supplies made to other businesses (B2B).

The Taxpayer did not challenge the VAT treatment, given that wholesale supplies made by tour operators fall within TOMS as per the relevant judgement of the European Court of Justice (‘ECJ’) in the case of European Commission v Republic of Greece (case C-293/11). However, the taxpayer challenged the retrospective application of the said treatment. 

The Taxpayer, represented by KPMG CY, filed an objection against the Tax Commissioner’s assessment to the Tax Tribunal. The question raised before the Tax Tribunal was to determine the date from which the VAT treatment is effective. Specifically, the Tax Tribunal was asked as to whether the VAT treatment must be applied:

     a. Retrospectively, as per the position of Tax Authorities or 

     b. As from 24 January 2018 when Circular 223 was issued or

     c. As from 6 July 2018 when the CY VAT Act was amended so as to adopt the judgment of  the ECJ

The Taxpayer argued that, based on the principle of protection of legitimate expectations, the effective date should have been 6 July 2018 or at least 24 January 2018 and should not have a retrospective effect.

Decision of the Tax Tribunal

The Tax Tribunal ruled that the effective date of the application of the TOMS provisions should have been 24 January 2018 and that the Tax Authorities were not entitled to apply them retrospectively. 

How can KPMG assist?

We consider that the Tax Tribunal comes to a clear conclusion with regards to the effective date of the application of TOMS (B2B). We therefore recommend that you examine whether this case has an impact to your business. 

Should you like to further discuss the content and potential impact of the Case to your business, please contact one of our trusted advisors from the Indirect Tax Department at KPMG Cyprus.

KPMG’s Indirect Tax team provides advice and assistance at the Cyprus and international level. We structure our effort to dovetail with your business issues and strategy. Our focus is on supplying value adding and pragmatic advice rather than just a list of recommendations. 


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