Share with your friends

Austria: VAT rules for travel agents (EC referral to CJEU)

Austria: VAT rules for travel agents

The European Commission today announced it has referred Austria to the Court of Justice of the European Union (CJEU) for Austria’s failure to apply special value added tax (VAT) rules for travel agents correctly.


Related content

As noted in the EC release, the special VAT rules for travel agents means that VAT is to be applied only on the margins made from sales of travel services to consumers. Travel agents cannot deduct the amount of VAT they pay while buying services from other businesses. However, the EC found that Austria does not correctly apply this rule because it currently excludes travel services sold to other businesses from the regime. This exclusion is not allowed under current EU rules.

The EC also found Austria 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 provides that the taxable amount must be defined for each individual sale—and not calculated on the basis of a group of sales.

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Want to do business with KPMG?


loading image Request for proposal