REPORT FROM THE COMMISSION TO THE COUNCIL on the place of taxation of the supply of goods and the supply of services, including restaurant services, for passengers on board ships, aircraft, trains or buses drawn up in accordance with Article 37(3) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax
Date: 2012-10-22
Institutions: European Commission
Subjects: VAT, air transport, carriage of passengers, catering industry, delivery, maritime transport, provision of services, rail transport, road transport, tax exemption

EUROPEAN 
COMMISSION 

Brussels, 22.10.2012  
COM(2012) 605 final 

REPORT FROM THE COMMISSION TO THE COUNCIL 

on the place of taxation of the supply of goods and the supply of services, including 
restaurant services, for passengers on board ships, aircraft, trains or buses drawn up in 
accordance with Article 37(3) of Council Directive 2006/112/EC of 28 November 2006 on 
the common system of value added tax 

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REPORT FROM THE COMMISSION TO THE COUNCIL 

on the place of taxation of the supply of goods and the supply of services, including 
restaurant services, for passengers on board ships, aircraft, trains or buses drawn up in 
accordance with Article 37(3) of Council Directive 2006/112/EC of 28 November 2006 on 
the common system of value added tax 

TABLE OF CONTENTS 

1. 

2. 

2.1. 

2.2. 

2.3. 

3. 

Background and scope of the report............................................................................. 3 

Description of the current rules governing the supply of goods and services carried 
out on board means of transport................................................................................... 3 

Necessity of particular rules for supplies of goods and services carried out on board 
means of transport ........................................................................................................ 3 

Place of supply ............................................................................................................. 4 

Exemption for on board supplies ................................................................................. 5 

Main problems identified ............................................................................................. 5 

3.1. 

Implementation and understanding of certain concepts............................................... 5 

3.1.1.  Concept of ‘the Community section’ of a passenger transport effected in the 

Community................................................................................................................... 6 

3.1.2.  Treatment of "stopovers" ............................................................................................. 6 

3.1.3.  Concepts of 'consumption on board' and 'restaurant and catering services'................. 6 

3.2. 

3.3. 

3.4. 

3.5. 

4. 

Services other than catering and restaurant services.................................................... 7 

Scope of the exemption applied ................................................................................... 7 

Particular issues highlighted by stakeholders .............................................................. 7 

The specific situation of supplies performed on board cruises .................................... 8 

The way forward .......................................................................................................... 8 

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1. 

BACKGROUND AND SCOPE OF THE REPORT 

In accordance with Article 37(3) of Council Directive 2006/112/EC of 28 November 2006 on 
the common system of value added tax1 (hereinafter: 'VAT Directive') the Commission shall, 
at  the  earliest  opportunity,  present  to  the  Council  a  report,  accompanied  if  necessary  by 
appropriate  proposals,  on  the  place  of  taxation  of  the  supply  of  goods  for  consumption  on 
board  and  the  supply  of  services,  including  restaurant  services,  for  passengers  on  board 
ships, aircraft or trains. 

Council  Directive  2008/8/EC  of  12 February  20082  (which  amended  the  VAT  Directive  in 
particular on the rules on the place of supply of services), was accompanied by the following 
minutes  statement:  "The  Council  and  the  Commission  agree  that  this  proposal  is  without 
prejudice  to  the  review  provided  for  in  Article 37  of  Directive  2006/112/EC  of  the  place  of 
taxation  of  the  supply  of  goods  for  consumption  on  board  and  the  supply  of  services, 
including restaurant services, for passengers on board ships, aircraft or trains. This duty to 
review shall  also explicitly cover services provided on  board ships (including  cruise ships), 
and  shall  also  extend  to  the  new  rule  determining  the  place  of  supply  as  laid  down  in 
Article 57 of Directive 2006/112/EC.". 

This  report  focuses  on  the  place  of  taxation  of  goods  for  consumption  and  of  services, 
including  restaurant  services,  supplied  to  passengers  on  board  ships,  aircraft  or  trains. 
However,  in  order  to  complete  the  picture  of  that  segment  of  the  market,  it  also  addresses 
other issues such as the treatment of take-away goods supplied on board, supplies on board 
buses, as well as exemptions currently applied in this sector. 

In  preparing  this  report,  the  Commission  took  various  steps  to  create  the  broadest  possible 
overview  of  the  situation  in  the  sector.  First  of  all,  businesses  that  are  active  in  this  sector 
were invited to give their assessment of the current situation, including the problems they face 
and suggest possible solutions for the future. Member States were also invited to outline their 
current practices and their expectations in this field. Finally, an expert study (hereinafter: 'the 
expert study') was conducted by an external contractor3 (published with this report). 

2. 

2.1. 

DESCRIPTION  OF  THE  CURRENT  RULES  GOVERNING  THE  SUPPLY  OF  GOODS  AND 
SERVICES CARRIED OUT ON BOARD MEANS OF TRANSPORT 

Necessity  of  particular  rules  for  supplies  of  goods  and  services  carried  out  on 
board means of transport 

The  nature  of  supplies  of  goods  and  services  as  such  is  the  same,  whether  or  not  they  are 
carried out on board. However, for goods and services supplied on-board means of transport, 
their physical place of supply is changing, as the supply takes place on a 'platform' which is 
normally  moving from  one place to  another. In other words,  the goods and services are not 
transported in order to be supplied, but are supplied while moving.  

1 
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3 

OJ L 347, 11.12.2006, p. 1 
OJ L 44, 20.2.2008, p. 11 
"Expert  study  on  the  issues  arising  from  taxing  the  supply  of  goods  and  the  supply  of  services, 
including restaurant and catering services, for consumption on board means of transport", of 8 February 
2012 undertaken by PricewaterhouseCoopers. 

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Therefore,  because  of  those  special  circumstances  under  which  on-board  supplies  are 
performed, particular rules apply. Their aim is to ensure to the extent possible taxation where 
consumption takes place, without making the application of these rules overly complex.  

Particular rules are justified, but it should be emphasized that although on-board supplies take 
place  in  a  particular  environment,  when  supplied  within  the  territory  of  the  EU,  the  actual 
consumption  to  which  they  give  rise  is  on  its  territory  and,  as  a  matter  of  principle,  they 
should  not  be  treated  differently  for  taxation  purposes  in  comparison  to  the  same  supplies 
performed elsewhere in the EU. 

2.2. 

Place of supply 

Under  Articles 37(1)  and  57(1)  of  the  VAT  Directive,  the  place  of  supply  of  goods  and 
catering and restaurant services supplied on board ships, aircraft or trains during "the section 
of a passenger transport operation effected within the Community" shall be deemed to be at 
the point of departure of the passenger transport operation. 

According to Articles 37(2) and 57(2), 'the section' (hereinafter: 'the Community section') is 
defined as "the section of the operation effected, without a stopover outside the Community, 
between the point of departure and the point of arrival of the passenger transport operation". 
The 'point of departure' means "the first scheduled point of passenger embarkation within the 
Community, where applicable after a stopover outside the Community". The 'point of arrival' 
means "the last scheduled point of disembarkation within the Community of passengers who 
embarked in the Community, where applicable before the stopover outside the Community". It 
means that part of the journey of the means of transport between the EU border and the first 
scheduled  point  of  passenger  embarkation  within  the  Community  takes  place  outside  ‘the 
Community  section’.  The  same  situation  occurs  for  part  of  the  journey  between  the  last 
scheduled point of passenger disembarkation and the EU border. 

A  'stopover'  means  a  stop  which  is  not  a  scheduled  point  of  passenger  embarkation  or 
disembarkation4. 

Article 37(1) and (2) applies to all goods supplied on board ships, aircraft or trains, whether or 
not  for  consumption  on  board,  during  the  Community  section.  Article 57  only  applies  to 
restaurant  and  catering  services  physically  carried  out  on  board  ships,  aircraft  or  trains.  For 
other services supplied on board, no particular rules are laid down. 

For  goods  supplied  on  board,  but  outside  the  Community  section,  Article 31  of  the  VAT 
Directive  is  applicable.  According  to  this  provision,  where  goods  are  not  dispatched  or 
transported, the place of supply shall be deemed to be the place where the goods are located 
at the time when the supply takes place. Article 31 also applies in the case where goods are 
supplied on board other means of transport, such as buses. 

For  catering  and  restaurant  services  supplied  on  board,  but  outside  the  Community  section, 
Article 55 of the VAT Directive applies. According to this provision "the place of supply of 
catering  and  restaurant  services  other  than  those  physically  carried  out  on  board  ships, 
aircraft  and  trains  during  the  section  of  passenger  transport  operation,  effected  within  the 
Community, shall be where the services are physically carried out".  

4 

The question of how the notion of "the stop" should be understood was developed in more detail by the 
Court  of  the  European  Union  in  its  judgment  of  15 September  2005  in  case  C-58/04,  Antje  Köhler  v 
Finanzamt Düsseldorf-Nord. 

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2.3. 

Exemption for on board supplies 

In accordance with Article 37(3) of the VAT Directive "pending the adoption of the proposals 
(…), Member States may exempt or continue to exempt, with deductibility of the VAT paid at 
the  preceding  stage,  the  supply  of  goods  for  consumption  on  board  (…)"  ships,  aircraft  and 
trains when those goods were supplied during the Community section.  

This provision only allows exemption for goods supplied for consumption on board and does 
not  extend  to  goods  to  be  taken  away  by  passengers.  Supplies  on  board  other  means  of 
transport, such as buses, are not covered and can therefore not benefit from exemption. 

No  exemption  is  provided  for  services  consumed  on  board,  such  as  catering  and  restaurant 
services.  However,  Article 371  and  Annex X,  Part B,  point 10,  of  the  VAT  Directive  does 
allow Member States to continue to exempt "the transport of passengers and, in so far as the 
transport  of  the  passengers  is  exempt,  the  transport  of  goods  accompanying  them,  such  as 
luggage or motor vehicles, or the supply of services relating to the transport of passengers". 
This  is  a  standstill  provision  that  can  be  maintained  until  the  definitive  arrangements  are 
adopted, and is available only for Member States having applied it on 1 January 1978 or for 
Member States which acceded the Union after that date, having obtained a specific derogation 
upon accession (see Articles 375 to 390b). Whilst it can be argued that catering and restaurant 
services  could  be  exempted  on  the  basis  of  this  standstill  provision,  other  services,  such  as 
hairdressing services during cruises, cannot qualify as being "services related to the transport 
of passengers".  

3. 

MAIN PROBLEMS IDENTIFIED 

One of the main problems identified is the divergence of application between Member States. 
It is apparent that exemptions are applied differently by Member States and that some rules 
are  not  entirely  respected  or  are  understood  differently.  The  expert  study  has  highlighted 
practical  problems  put  forward  by  stakeholders5.  The  difference  in  application  is  the  main 
cause of complexity, and results in an increase in administrative burdens for business. Failure 
to harmonise exemption can also create distortions of competition. 

3.1. 

Implementation and understanding of certain concepts 

Problems have been identified with certain concepts to be found in Articles 37 and 57 of the 
VAT  Directive.  Notwithstanding  existing  definitions,  certain  Member  States  are  applying 
these concepts in different ways. It appears that ships and aircraft on international routes are 
especially concerned.  

In particular, it appears that there are situations where the national provisions implementing 
Articles 37 and 57 do not cover all three means of transport (ships, aircraft and trains).  

For  buses,  the  legal  provisions  are  correct  in  all  Member  States.  However,  there  are  some 
doubts about their correct application in practice and how they can be controlled.  

5 

For detailed information, see chapter 4 of the expert study – in particular pages 48-50, 55 and 58. 

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3.1.1.  Concept  of  ‘the  Community  section’  of  a  passenger  transport  effected  in  the 

Community 

In at least three Member States the definition of the Community section is not entirely clear6. 
Typically certain elements of the definition are missing – for example, there is no definition 
of the point of departure and/or the point of arrival or the definition used is only a partial one. 
In one Member State there is no definition of the Community section at all. 

In  five  Member  States  the  onboard  supply  of  goods  and  services  is  taxable  to  a  different 
extent outside their territory, regardless of where – inside or outside the Community section – 
they should have been taxed in accordance with the rules7.  

Council  Implementing  Regulation  (EU)  No 282/2011  (hereinafter:  'VAT  Implementing 
Regulation')8 has provided some clarification, but this differentiation remains complicated and 
leaves the door open to misinterpretation and inconsistency.  

3.1.2.  Treatment of "stopovers" 

Divergences are observed between Member States in relation to the treatment of stopovers in 
comparison to the first point of embarkation or the last point of disembarkation of passengers 
within  the  EU.  In  at  least  ten  Member  States,  the  dividing  line  seems  not  to  be  correct.9 
According to the expert study, some Member States consider that when passengers can get off 
of a means of transport to visit a place and, after this excursion, get back on board to continue 
their  journey,  this  is  regarded  as  disembarkation  and  embarkation  of  passengers.  This 
concerns the cruise industry in particular.  

If no new passengers can get on and none of the passengers on board can permanently leave 
the ship, this should not be regarded as embarkation or disembarkation. Such a situation must 
be regarded instead as a stopover. Where a stopover is treated as a first point of embarkation 
or a last point of disembarkation, this may give rise to difficulties, where – because of varying 
interpretations  of  the  Community  section  –  more  than  one  Member  State  wants  to  tax  the 
same supplies.  

Finally, the treatment of unscheduled stopovers might give rise to types of difficulties similar 
to those described above. However, the expert study does not gather any information on that 
point.  

3.1.3.  Concepts of 'consumption on board' and 'restaurant and catering services'  

The expert study identified certain problems with these concepts. 

Consumption on board: There is no definition in the VAT Directive, and only a few Member 
States have provided official guidance, which varies from one Member State to another. 

Catering  and  restaurant  services:  A  clear  definition  has  only  been  available  since  1 July 
201110. Prior to that, the understanding of this concept was based on guidance provided by the 

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9 
10 

Look chapter 4 of the expert study, in particular pages 39-40 and 42-43. 
Look chapter 4 of the expert study, in particular pages 42-43 and 52-55. 
See in particular Articles 35 to 37. 
Look chapter 4 of the expert study, in particular pages 40 and 42-43. 
According to Article 6 of the VAT Implementing Regulation, “Restaurant and catering services mean 
services  consisting  of  the  supply  of  prepared  or  unprepared  food  or  beverages  or  both,  for  human 

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Court of Justice of the European Union (hereinafter: 'CJEU'), in particular by its judgment in 
the  Faaborg-Gelting  Linien  case11.  The  concept  was  further  developed  in  the  Bog  case12  in 
respect of which the CJEU gave a ruling on 10 March 2011, where it was specified in more 
detail  what  should  be  the  level  of  sufficient  support  services  to  recognise  the  supply  as  a 
catering  service.  Subject  to  these  developments,  the  problems  of  definition  should  be 
minimised.  However,  one  cannot  rule  out  the  possibility  that  further  clarification  will  be 
needed, particularly in order to align the VAT Implementing Regulation with the recent case 
law. 

3.2. 

Services other than catering and restaurant services 

As  only  catering  and  restaurant  services  are  covered  by  Articles 55  and  57  and  taxed  in 
accordance  with  the  particular  rules  described  above,  all  other  services  should  be  treated  in 
the same way, whether or not they are provided on board means of transport. Some questions 
have  arisen,  particularly  with  regard  to  services  provided  to  a  person  (such  as  hairdressers, 
beauticians…), but it has not as yet been possible to clearly identify those services for which a 
particular rule would be necessary.  

3.3. 

Scope of the exemption applied 

One group of Member States exempts goods for consumption on board ships, aircraft or trains 
as provided for in Article 37(3) of the VAT Directive. However, at least two Member States 
also  allow  exemption  of  on-board  supplies  of  goods  made  whilst  within  the  territory  of  the 
Community, but outside the Community section, which is not authorised by Article 37(3) of 
the VAT Directive13.  

Furthermore, it appears that eight Member States also exempt services supplied to passengers 
on  board  ships,  aircraft  or  trains,  in  particular  restaurant  and  catering  services14.  The 
Commission  considers  that  Article 37  only  allows  an  exemption  of  the  supply  of  goods  for 
consumption on board ships, aircraft or trains carried out during the Community section. The 
exemption provided for in Article 37 does not cover goods which are to be taken away, or any 
services.  Exemption  in  such  cases  is  only  possible  pursuant  to  Article 371  and  Annex X, 
Part B, point 10, which allow Member States to continue to exempt "in so far as the transport 
of passengers is exempted, […] the supply of services relating to the transport of passengers". 
It appears that five Member States exclude on-board supplies from any taxation to a different 
extent through the way in which the place-of-supply rules are applied15. They consider those 
supplies to be outside the territorial scope of VAT. As a result they do not require any specific 
rules to provide for exemption.  

The incorrect application of the rules on the territorial scope of VAT or of the exemption only 
seems to concern ships and aircraft. For trains and buses, the rules seem to be implemented 

consumption,  accompanied  by  sufficient  support  service  allowing  for  the  immediate  consumption 
thereof.  The  provision  of  food  or  beverages  or  both  is  only  one  component  of  the  whole  in  which 
services shall predominate. Restaurant services are the supply of such services on the premises of the 
supplier, and catering services are the supply of such services off the premises of the supplier.”. 
Case  C-231/94,  judgment  of  the  CJEU  of  2 May  1996,  Faaborg-Gelting  Linien  a/s  v  Finanzamt 
Flensburg.  
Joined cases C-497/09, C-499/09, C-501/09, C-502/09, judgment of the CJEU of 10 March 2011, Bog 
and Others v Finanzamt Burgdorf, Hamburg-Barmbek-Uhlenhorst, Minden and Detmold. 
Look chapter 4 of the expert study, in particular at pages 52 and 53. 
Look chapter 4 of the expert study, in particular at pages 54 and 55. 
Look chapter 4 of the expert study, in particular at pages 42-43 and 52-55. 

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correctly in all Member States. The divergence in actual taxation between Member States is 
seen  as  one  of  the  main  problems  with  the  current  situation,  as  it  can  have  serious 
implications  for  the  businesses  concerned  and  distorts  competition,  especially  between 
competitors established within the EU and outside the EU. 

3.4. 

Particular issues highlighted by stakeholders 

The stakeholders who were consulted stressed that the current legal framework is complex (as 
it requires the application of different sets of rules – Articles 31 and 55 or Articles 37 and 57 – 
within  the  EU)  and  varies  from  one  Member  State  to  another.  The  various  exemption 
schemes,  although  greatly  appreciated,  are  applied  differently  by  Member  States  and  this  is 
seen as a complication. Not surprisingly, a harmonised exemption is the preferred option. 

Stakeholders also underlined the lack of clear-cut definitions as a cause of serious difficulties, 
in particular when a business operates in more than one Member State, which is normally the 
case in this sector. The divergent rates applicable were also mentioned. 

Stakeholders highlighted the difficulties that they encounter when making onboard supplies of 
goods or services for which they are liable to pay VAT in a Member State where they are not 
established  and  have  to  register  for  VAT  purposes.  They  pointed  to  difficulties  linked  with 
differences between Member States concerning technical requirements for cash registers and 
obligations, VAT rates and different currencies.  

These difficulties are no different from those encountered by any other business liable to pay 
VAT in a Member State where it is not established, and stakeholders regret that there are no 
simplifications or schemes, like a one stop shop (OSS), available to them. 

Some  stakeholders  admitted  that  they  register  in  some  Member  States  only,  and  not  in  all 
Member States in which they would be required to do so under the current provisions. 

3.5. 

The specific situation of supplies performed on board cruises 

The  particular  feature  of  the  cruise  industry  is  that  cruises  often  start  and  end  in  the  same 
harbour.  Therefore  it  seems  that  the  prime  purpose  of  a  cruise  journey  is  not  to  transport 
passengers from one place to another. Further, the itinerary of a cruise ship may vary and is 
more flexible compared to other means of transport. 

During  the  process  of  collecting  information  on  the  current  state  of  play  in  relation  to  on-
board supplies, the cruise and ferry industry was the most active in terms of its response. That 
industry  emphasized  that,  for  its  activities,  the  rules  are  particularly  complicated  and 
suggested that all on-board supplies of goods and services should be exempted. 

On board cruise ships, a wider variety of goods and services are available than is the case for 
other  means  of  transport.  For  example,  services  such  as  those  of  hairdressers,  tailors, 
beauticians, entertainment and educational activities are on offer. The variety of goods is also 
much broader.  

The  cruise  industry  emphasized  that  there  is  strong  competition  between  operators  in  that 
segment  of  the  market.  The  way  in  which  rules  are  formulated  influences  the  competitive 
position, especially between competitors established within the EU and outside the EU. 

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During the process of consultation it was suggested that, for cruises, the boat could in many 
cases be considered to be a fixed establishment, as the supplies performed are complex and 
frequently require sophisticated arrangements16. 

4. 

THE WAY FORWARD  

The goods and services covered by this report are typical consumer products on which VAT is 
normally  charged  when  they  are  supplied  within  the  territory  of  the  EU.  As  a  matter  of 
principle,  the  fact  that  the  same  goods  and  services  are  supplied  on  board  certain  means  of 
transport cannot be a sufficient justification for exempting those supplies within the EU from 
VAT. 

This  report  is  not  presented  as  such  in  the  framework  on  the  VAT  strategy  set  out  in  the 
Commission's Communication on the future of VAT. Nevertheless, the future treatment of the 
transactions  involved  should  be  consistent  with  the  guiding  principles  of  that  strategy,  in 
particular the need to increase the efficiency of the tax by broadening the tax base, but also 
the need for simple rules. 

Given  that  the  main  purpose  of  VAT  is  to  raise  revenues  and  to  tax  consumption,  the 
Commission is of the opinion that the actual taxation of supplies of goods and services taking 
place  on  board  of  means  of  transport  should  be  an  objective  to  be  pursued  in  the  future. 
Removing the exemption would also be in line with the need to make the tax systems more 
efficient.  Preparing  for  the  future  work  to  be  undertaken  in  that  field,  the  Commission  is 
aware that in the expert study almost all consulted stakeholders (in particular representatives 
of the cruise industry), who replied to the survey sent to them by the contractor of the study, 
indicated  that  it  is  desirable  for  them  to  keep  the  optional  VAT  exemption,  as  they  fear  a 
negative economic, social and environmental impact. 

The  Commission  also  acknowledges  stakeholders’  complaints  about  the  complexity  of  the 
current situation. This complexity stems from the divergent application and interpretation of 
the  current  rules,  the  legal  framework  itself  and  the  burden  of  administrative  compliance 
resulting  from  the  two  previous  factors,  notably  (i)  the  patchwork  of  exemptions,  (ii)  the 
definition of 'the Community section', (iii) the definition of restaurant and catering services, 
and (iiii) the understanding of notions of 'stopover' and 'non-scheduled stops'. In this respect, 
the Commission will verify which kind of clarifications could be agreed with Member States 
in  order  to  address  the  current  uncertainties.  The  VAT  Committee  could  be  used  in  this 
respect in order to reach common guidelines.  

The  Commission  will  also  examine  further  the  situation  in  order  to  assess  if  infringement 
procedures should be undertaken for some Member States. 

Even if the abovementioned complexities can be solved, it is questionable whether the current 
rules  laid  down  in  the  VAT  Directive  are  satisfactory  for  ensuring  the  taxation  of  the 
transactions at stake in a simple, efficient and robust way. In the view of the Commission, the 
application of these rules would still be complex for businesses and, in many cases, difficult 
or even impossible to control for tax authorities. 

16 

It  should  be  noted  that  the  concept  of  a  fixed  establishment  is  defined  in  Article 11  of  the  VAT 
Implementing Regulation. 

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In the Commission’s view, a change in the taxation of supplies on board means of transport 
giving  rise  to  consumption  in  the  EU  cannot  be  achieved  for  the  supplies  on  board  alone, 
without putting these questions in the broader perspective of the design of a simpler and more 
neutral VAT framework for passenger transport activities in general. 

In  order  to  ensure  such  consistency,  a  legislative  proposal  in  this  field  should  be  adopted, 
together  with  the  proposals  that  will  be  made  for  passenger  transport  activities,  following  a 
comprehensive impact assessment 

These  proposals  should  ensure  that  the  actual  taxation  of  the  supplies  on  board  means  of 
transport is simple and neutral. 

Moreover, there is an acute need to make the rules less complex than is currently the case, and 
the obligations to be fulfilled by the operators should also be as light as possible. However, 
everything depends on the choice that will be made on the taxation system as such.  

If the rules adopted mean that operators are liable to pay tax in Member States where they are 
not  established,  the  case  for  a  form  of  one  stop  shop  (OSS)  to  simplify  compliance  would 
clearly have to be examined.  

As  the  Communication  on  the  future  of  VAT  pointed  out,  such  a  measure  could  only  be 
considered after 2015, based on the experience from the mini one stop shop (MOSS) that will 
be  implemented  for  telecommunications,  radio  and  television  broadcasting  and  electronic 
services supplied by non-established suppliers to non-taxable persons (final consumers).  

The  Commission  is  of  the  opinion  that  the  issues  linked  with  supplies  on  board  means  of 
transport should be addressed in conjunction with the passenger transport activities where, in 
accordance with the Communication on the future of VAT, a more neutral and simpler VAT 
framework  for  passenger  transport  activities  will  be  proposed17.  First  of  all  these  issues  are 
closely related and, secondly, the types of challenges and difficulties being faced are similar. 

The Commission therefore considers that it is not opportune to accompany the present report 
with specific legislative proposals.  

The Council is invited to express its views on the content of this report and, in particular, on 
the way the Commission suggests to take this file forward. 

At the same time, other institutions are welcome to give their opinion on this report and the 
suggested way forward, if they wish to do so. 

17 

See COM(2011) 851 action n°9 

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