Communication in accordance with Article 395 of Council Directive 2006/112/EC

Pursuant to Article 395 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (the 'VAT Directive'), the Council, acting unanimously on a proposal from the Commission, may authorise any Member State to introduce special measures for derogation from the provisions of this Directive, in order to simplify the procedure for collecting VAT or to prevent certain forms of tax evasion or avoidance.

Articles 306 to 310 of the VAT Directive provide for a special 'margin' scheme for travel agents whereby only the difference (or margin), between the price (without VAT) paid by the customer and the actual costs of the travel agent, is taxed. This scheme is applicable insofar the travel agent acts in his own name and not solely as intermediary. By letter registered at the Commission on 23 December 2015, the Republic of Austria requested to be authorised to introduce a measure derogating from the special margin scheme for travel agents.

When the Commission receives requests in accordance with Article 395 of the VAT Directive, these are examined to ensure that the basic conditions for their granting are fulfilled. In this context, the Commission has always taken a limited, cautious approach to ensure that derogations do not undermine the operation of the general VAT system, are limited in scope, necessary and proportionate. It therefore follows that derogations should only be granted when a particular situation in a Member State requires a specific measure.

In the present case, however, it is not justified why such a derogation, requested as a simplification measure, would specifically be needed in Austria. On the contrary, the special scheme for travel agents is implemented everywhere in the EU and the margin is to be calculated in all Member States in the same way. In addition, the Commission considers that such a derogating measure would give a specific advantage to travel agents established in Austria in comparison to travel agents established in other Member States. Therefore the Commission objects to the request made by the Republic of Austria.