- Taxpayers Division Central Directorate for Small and Medium Enterprises Response no. 155/2024 on VAT treatment of tourist packages and hospitality packages
- Question presented by Alfa S.r.l., Italian branch of the US company Alfa LLC with core business consisting of provision of experiential tourism services rendered to people participating in sports, entertainment, fashion and cultural events.
- Travel packages include accommodation, hospitality services, transport and access tickets to events.
- Company believes that, for the purposes of applying the special VAT regime referred to in Article 74ter of the VAT Decree, all costs incurred “to the direct benefit of travellers” should be included among the costs which have a direct and immediate connection with the tourist package.
- Furthermore, the Company believes that the entry ticket to the event is not ancillary in nature compared to the other experiential services offered. Therefore, the Applicant believes it is necessary to apply VAT on the sale of entrance tickets separately from the consideration relating to the sale of hospitality packages, applying to each service its own VAT treatment.
- Italian tax authorities do not agree with these views.
- The special VAT regime for travel agencies is based on articles 306 to 310 of the directive of 28 November 2006, n. 2006/112/EC (so-called ”VAT Directive”), and at national level, is governed by article 74ter of the VAT Decree and by ministerial decree 30 July 1999, n. 340, the scope and methods of application of which have been clarified with various practical documents (see circular no. 328/E of 1997; resolution no. 233/E of 2002; resolution no. 141/E of 2004).
- In essence, this special regime VAT provides that all operations carried out by the tour operator to guarantee the ”tourist package” are considered as a single supply of services, subject to tax in the Member State in which the travel agency has the headquarters of its economic activity or a permanent establishment from which it has provided this service.
- With regard to the second question, the solution proposed by the Applicant appears to be acceptable. In conclusion, the tax relating to the sale of entrance tickets and various hospitality services must be applied separately, reserving the relevant VAT treatment for each operation.
Source: agenziaentrate.gov.it
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
