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Spain – Travel Agent’s VAT special regime turns to be applicable to Internet platforms rendering transport of people services

According  to the Spanish binding consultation DGT CV 28-12-17 the services of “transport of people” with driver offered online,  must receive the same treatment as a travel agent’s by being obliged to use  their  special regime.

When a Company puts together car owners who render transport services with clients who need transport, using for this purposes a website, and invoicing  directly the final client while hiring the transport services,  the complex service is qualified in the same way a travel agent’s activity would.

The key for the Spanish Tax authorities is the fact that the transport services are rendered under own name but with alien means .

Travel Agents do exactly the same. Subcontracting  a third party but assuming the service as own.

The special regime of travel agents in Spain obliges operators to charge a 21% out of their gross margin. The gross margin is the difference between the amount collected from the client (without VAT) and the amount of the expenses incurred by the travel agent´s to be used in the composition of the client´s order, including taxes.

Whatsoever, the input VAT afforded by the travel agent’s shall be 10%.

We must remind at this point, that the special regime for travel agent’s has the aim to allow the Companies obliged to keep the secrecy on their markups, avoiding unfair competition.

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VAT treatment applicable to the provision of free meals to staff in the absence of an alternative catering offer at the place of activity system in UE

French companies have recently requested for the restitution of the VAT which they had to pay because of expenses related to free meals served to their employees.

The French Conseil d’Etat (CE, October 11, 2017, No. 397902, “SAS Autogrill Côté France”) agrees with it on the grounds that if the free supply of meals by companies to its employees is in principle treated as a provision of services subject to VAT, it is different in the absence of alternative catering offer at the place of activity of employees.

Referring to the European case law (ECJ, 11 December 2008, C – 371/07, Danfoss A / S and AstraZeneca A / S vs. Skatteministeriet), the Conseil d’Etat recalls that VAT liability does not cover the provision, free of charge, of meals in company canteens to business contacts in the course of meetings held on the company premises where objective evidence indicates that those meals are provided for strictly business related purposes.

On the other hand, the provision, free of charge, of meals by a company to its staff on their premises is neither subject to VAT at least when the needs of the company, such as the need to ensure that work meetings are run smoothly and without interruptions, require the employer to ensure that meals are provided.

In the case at hand, the company operates catering establishments located on the motorway network. As part of this activity, the company provides free meals to its staff.

In view of the activity on the motorway network, the Conseil d’Etat considers that the provision of meals to staff meets specific needs, considering the lack of alternative catering offer at the place of business of the company and, correspondingly, should not be treated as a supply of services for consideration for VAT purpose.

The company can therefore deduct the VAT on its cost without accounting for VAT on the value of meals it provides free of charge to its staff under the aforementioned conditions.


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Malta – Budget Measures 2018

On 9th October 2017 the following Budget Measures for 2018 were announced by the Maltese Minister of Finance and are expected to be introduced in the forthcoming calendar year once the relative Bill is approved by Parliament. Read more