Joined Cases C‑250/14 and C‑289/14

Air France-KLM

and

Hop!-Brit Air SAS

v

Ministère des Finances et des Comptes publics

(Requests for a preliminary ruling from the Conseil d’État (France))

‛Value added tax — Chargeable event and chargeability — Air transport — Ticket purchased but not used — Provision of the transport service — Issue of the ticket — Time of payment of the tax’

Summary — Judgment of the Court (First Chamber), 23 December 2015

Harmonisation of fiscal legislation — Common system of value added tax — Taxable transactions — Supply of services effected for consideration — Concept — Passenger air transport — Included — Marketing by a third party of an airline’s tickets on behalf of the latter in the context of a franchise agreement — Lump sum paid by the third party to the airline, in respect of tickets issued and no longer valid, calculated as a percentage of the annual turnover from the corresponding flight routes — Taxable amount as consideration for those tickets

Harmonisation of fiscal legislation — Common system of value added tax — Chargeable event and chargeability of the tax — Purchase of an air ticket by a passenger — Ticket subsequently unused — Chargeability of the tax on receipt of the payment of the price of the ticket — Receipt by the airline via a third party acting in its name and on its behalf, or by a third party acting in its own name — No effect

Harmonisation of fiscal legislation — Common system of value added tax — Taxable transactions — Supply of services effected for consideration — Concept — Passenger air transport — Included — Conditions — Tickets issued by an airline which are unused by the passengers and non-refundable — No effect — Issue of tickets subject to value added tax

Articles 2(1) and 10(2) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment, as amended by Directive 1999/59, then by Directive 2001/115, must be interpreted as meaning that the issue by an airline of tickets is subject to value added tax where the tickets issued have not been used by passengers and the latter are unable to obtain a refund for those tickets. A supply of services, such as air passenger transport, is subject to value added tax where, first, the sum paid by a passenger to an airline, in the context of the legal relationship constituted by the transport contract, is directly linked with an identifiable service for which it constitutes the remuneration and, secondly, that service is performed. However, it is possible to perform the services provided in performance of obligations arising from a contract to transport passengers by air only if the passenger of the airline turns up on the agreed date and at the agreed place of boarding, the customer’s right to performance of those services being given by the airline until the time of boarding, according to the conditions set out in the contract to transport passengers concluded when the ticket was purchased. Therefore, the consideration for the price paid when the ticket was purchased consists of the passenger’s right to benefit from the performance of obligations arising from the transport contract, regardless of whether the passenger exercises that right, since the airline fulfils the service by enabling the passenger to benefit from those services. (see paras 25-28, 35, operative part 1)

Articles 2(1) and the first and second subparagraph of 10(2) of Sixth Council Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, as amended by Directive 1999/59, then by Directive 2001/115, must be interpreted as meaning that the value added tax paid when the air ticket was purchased by a passenger who has not used it becomes chargeable on receipt of payment of the ticket price, whether by the airline itself, by a third party acting in its name and on its behalf, or by a third party acting in its own name but on behalf of the airline. (see para. 43, operative part 2)