EEC as regards the special scheme for travel agents - Main contents

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dossier	COM(2002)64 - Amendment of Directive 77/388/EEC as regards the special scheme for travel agents.
document	COM(2002)64
date	February 8, 2002

(1) According to the Commission's Communication to the Council and the European Parliament 'A Strategy to improve the functioning of the Internal Market' i, a more uniform application of the community provisions by Member States is one of the four objectives for improving the functioning of the Internal Market in the short term.

(2) Member States currently apply different interpretations of the special scheme for travel agents, as set out in Article 26 of the sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes - Common system of value added tax: uniform basis of assessment i, as last amended by Directive 2001/41/EC i, resulting in different application of that scheme in the different Member States and leading to distortion of competition for certain operators.

(3) Extending its scope to include all supplies of travel packages under the conditions of Article 26 of Directive 77/388/EEC would eliminate the different interpretations given by Member States to the supplies covered by this special scheme and ensure that the original objective of taxation in the Member State of consumption is better met.

(4) A similar scheme whereby the profit margin is taxed is set out in Article 26a of Directive 77/388/EEC for second-hand goods, works of art, collectors' items and antiques. That Article contains detailed definitions, which could be used to clarify the definitions in Article 26 and simplify the application of the special scheme for travel agents.

(5) Due to the special nature of the services supplied by travel agents, which purchase different services from third parties, combine them into a travel package and then sell these packages, it is often very difficult for travel agents to determine their profit margin for each separate supply. A system allowing them to calculate a global profit margin over a certain period of time would simplify the system and could solve many of their problems in this field.

(6) For similar reasons travel agents should be allowed to opt for the normal VAT arrangements in order to ensure the principle of neutrality of the VAT.

(7) Existing derogations under Article 28(3) and Annexes E and F should be abolished in order to ensure a more uniform application of the special scheme for travel agents. Similarly Article 28(3)(g) and Article 15 i should be deleted as they also allow Member States to apply divergent rules for taxing the services of travel agents.

(8) Council Decision upon request of the Kingdom of Belgium of 13 September 1978, granting to the Kingdom of Belgium a derogation under Article 27(1) should be repealed in order to ensure a more harmonised application of the special scheme of travel agents.

(9) Directive 77/388/EEC should therefore be amended accordingly.