Case C‑189/11

European Commission

v

Kingdom of Spain

‛Failure of a Member State to fulfil obligations — Taxation — VAT — Directive 2006/112/EC — Articles 306 to 310 — Special scheme for travel agencies — Discrepancies between language versions — National legislation providing for the application of the special scheme to persons other than travelers — Concepts of ‘traveler’ and ‘customer’ — Exclusion from the special scheme of certain sales to the public — Mention in the invoice of an amount of deductible VAT not related to the input tax due or paid — Overall determination of the taxable amount for a given period — Not compatible’

Summary — Judgment of the Court (Third Chamber), 26 September 2013

Harmonisation of fiscal legislation — Common system of value added tax — Special scheme for travel agencies — National legislation providing for the application of the special scheme to persons other than travelers — Exclusion from the special scheme of certain sales to the public — Scope — Retail agents acting as intermediaries for a wholesale agent — Not included — Failure to fulfil obligations

Harmonisation of fiscal legislation — Common system of value added tax — Special scheme for travel agencies — National legislation providing for the application of the special scheme to persons other than travelers — Overall determination of the taxable amount for a given period — Failure to fulfil obligations

Harmonisation of fiscal legislation — Common system of value added tax — Special scheme for travel agencies — National legislation providing for the application of the special scheme to persons other than travelers — Mention in the invoice of an amount of value added tax not related to the input tax due or paid by the customer — Authorisation to deduct that amount — Failure to fulfil obligations

Actions for failure to fulfil obligations — Proof of failure — Burden of proof on Commission — Production of evidence showing failure — Incumbent on Member State concerned to refute evidence

Harmonisation of fiscal legislation — Common system of value added tax — Special scheme for travel agencies — National legislation providing for the application of the special scheme to persons other than travelers — Travel agencies applying that scheme as intermediaries

Harmonisation of fiscal legislation — Common system of value added tax — Special scheme for travel agencies — Aim — Customer-based approach — No failure to fulfil obligations — Traveler-based approach — Non-conformity of the special scheme for travel agents

European Union law — Interpretation — Texts in several languages — Differences between the various language versions — General scheme and purpose of the rules at issue taken into account

See the text of the decision. (see paras 56, 57)

In the field of taxation, the objective of the special scheme for travel agents is to simplify the rules relating to value added tax applicable to travel agents. It also seeks a fair distribution of the revenue from the charging of that tax among the Member States, by ensuring, first, the attribution of the value added tax revenue relating to each individual service to the Member State in which the final consumption of the service took place and, secondly, the attribution of that relating to the travel agent’s margin to the Member State in which the agent is established.. The customer-based approach is the most conducive to achieving those two objectives by permitting travel agents to benefit from simplified rules regardless of the type of customer to whom they provide their services and by encouraging, in that way, a fair distribution of revenue between the Member States. The fact that, when the special scheme for travel agents was adopted in 1977, the majority of those agents sold their services directly to the final consumer does not mean that the legislature intended to limit the special scheme to sales of that kind and to exclude sales to other operators. Articles 306 to 310 of Directive 2006/112 on the common system of value added tax must be interpreted by following the customer-based approach. (see paras 59-61, 69)

In the field of value added tax, the risk of travel agents applying the special scheme even where they are acting as intermediaries is unfounded, since the express terms of the second subparagraph of Article 306(1) of Directive 2006/112 on the common system of value added tax exclude such a possibility in any event. (see para. 68)

See the text of the decision. (see para. 81)

A Member State which authorises travels agencies, in the case of a travel service provided to another taxable person, consisting only of supplies carried out in the national territory, to charge in the invoice an overall amount of value added tax that is not related to the value added tax actually charged to the customer, and by authorising the customer, where he is a taxable person, to deduct that overall amount from the tax payable, fails to fulfil its obligations under Articles 168 and 226 of Directive 2006/112 on the common system of value added tax. In order to ensure neutrality of value added tax, the amount of the tax deducted must exactly correspond to the amount of the input tax due or paid. Furthermore, the mention in the invoice of an amount corresponding to a percentage of the total price invoiced is not consistent with the rules relating to the content of invoices set out in Article 226 of Directive 2006/112. Furthermore, national legislation which permits a possible deduction only where the services are supplied in its territory discriminates on the basis of nationality, which is also incompatible with the common system of value added tax. (see paras 91, 94, 95, 106, operative part 1)

A Member State which authorises travels agencies, in so far as they benefit from the special scheme, to make an overall determination of the taxable amount for each tax period, fails to fulfil its obligations under Article 308 of Directive 2006/112 on the common system of value added tax. The taxable amount must be calculated in accordance with Article 308 of Directive 2006/112, by referring to each single service provided by the travel agent, not on an overall basis. (see paras 103, 106, operative part 1)