On April 23, 2020, the ECJ issued his decision in the case C‑28/19 (Ryanair Ltd). While this is no VAT case, it includes a discussion on a VAT related topic, Air carriers must indicate the VAT on domestic flights.
Article in the EU VAT Directive
Not a VAT case
Facts
In 2011, Autorità Garante della Concor+renza e del Mercato – Antitrust (Competition and Market Authority, Italy)(‘the AGCM’) criticised Ryanair for having published on the internet prices for air services that did not indicate, from the first time that they were shown, the following elements: (1) the amount of VAT on domestic flights, (2) the online check-in fees, and (3) the fees charged when paying by a credit card other than that approved by Ryanair.
The Court held that VAT applied to the air fare for domestic flights is not an optional price supplement and must be indicated in the initial offer.
Questions
Is the second sentence of Article 23(1) of Regulation (EC) No 1008/2008 of the European Parliament and of the Council of 24 September 2008 on common rules for the operation of air services in the Community 1 to be interpreted as meaning that an online check-in fee and an ‘administration fee’ for credit card purchases, which are additional to the price of the ticket, and the VAT applied to air fares and to optional supplements for national flights, fall within the category of unavoidable, foreseeable or optional price supplements?
Is the fourth sentence of Article 23(1) of Regulation No 1008/2008 to be interpreted in the sense that the word ‘optional’ covers price supplements which the majority of consumers are able to avoid?
AG Opinion
None
Decision
Article 23(1) of Regulation (EC) No 1008/2008 of the European Parliament and of the Council of 24 September 2008 on common rules for the operation of air services in the Community must be interpreted as meaning that passengers’ check-in fees whose payment cannot be avoided because there is no alternative method of checking-in free of charge, the value added tax (VAT) applied to fares for domestic flights, and administrative fees for purchases made by means of a credit card other than that approved by the air carrier constitute price elements that are unavoidable and foreseeable within the meaning of the second sentence of that provision. By contrast, that provision must be interpreted as meaning that passengers’ check-in fees whose payment can be avoided by using a free check-in option and the VAT applied to optional supplements relating to domestic flights constitute an optional price supplement within the meaning of the fourth sentence of that provision.
Personal comments/VATupdate
Source Curia
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