Value-added taxation of travel in the EU : lack of neutrality in the application of special scheme for travel agents

Abstract

Special VAT scheme for travel agents, as laid down in Articles 306–310 of the VAT Directive, is no longer suitable in the globalized travel industry. Travel agencies are competing with an increasing number of foreign operators, intermediaries, online agencies and new technologies. The current provisions and their application give rise to unequal treatment of taxable persons supplying similar or comparable services. This master’s thesis aims at analysing the lack of neutrality within the current EU normative framework of provision and intermediation of travel services. The research focuses on three issue areas: inconsistent implementations of TOMS in different Member States, the VAT treatment of different economic operators, and the unequal position of travel agents established in the EU in comparison with those located in third countries. Finally, possible solutions are discussed, and recommendations given as to how the TOMS may be brought up-to-date in order to levy tax on travel in a more neutral manner.