Update: the Dutch Ministry of Finance has updated their Decree on TOMS (in Dutch) based on this case. This contains some clarifications, a view on intermediation and a FAQ.
On 19 December 2018 the European Court of Justice gave its judgment in case C-552/17 (Alpenchalets Resorts). This case deals with the VAT travel agents scheme and the question when something is ancillary and what rate applies to these ancillary activities.
Unofficial translation
Facts (simplified):
Alpenchalets Resorts GmbH rents houses from their owners and then lets them for holiday purposes to its customers. On arrival, the owners or their agents provide further services to the individual customers, such as cleaning of the accommodation and, in some cases, a laundry and ‘bread roll’ service.
The question is if this qualifies as a ‘service provided by a travel agent’. And if it can, whether the reduced VAT rate should apply on the taxable amount (the margin) regarding the accommodation component of the service provided.
Opinion of Advocate General
Advocate General Bobek gave its opinion in this case on 5 September 2018. The conclusion was:
(1) The special scheme for travel agents applies to a supply of a service which consists in the provision of one bought-in service, provided that the bought-in service is accommodation or transport.
(2) The supply of services that is subject to the special scheme for travel agents cannot be subject to a tax rate reduction for the provision of holiday accommodation.
Judgment:
The European Court of Justice rules as follows:
The mere provision by a travel agency of a holiday residence rented from other taxable persons or such provision of a holiday residence accompanied by additional benefits, irrespective of the extent of such additional benefits, each constitutes a single service under the special VAT scheme for travel agents.
The provision of services by travel agencies consisting of the provision of holiday accommodation may not be subject to a reduced rate.
