Tour operators and travel agents: wholesale supplies of travel services

Sunday, June 22, 2014

by Nick Ryan

VAT and travel agents continues to cause concern and create problems for those involved in the industry. For most EU Member States the VAT margin scheme for those providing travel services direct to the end customer has been in place for some considerable time. In Ireland, it is still a toddler testing the boundaries. Identifying whether the travel services provided qualify as margin scheme or not has been a constant thorn but now the argument has extended to the wholesale supply of travel services.
This additional problem follows the series of infringement proceedings taken by the European Commission against France, Spain, Greece, Finland, Czech Republic Italy, Portugal and Poland in connection with the operation of TAMS. The decision reached following these proceedings is that wholesale supplies of travel services should be included as a margin scheme supply. The decision has not been warmly welcomed and other EU Member States have been slow in progressing the matter.
In Ireland, Revenue eBrief No. 44/14 provides for a hedge-sitting experience in that it confirms the decision reached, adds that the implications of this decision are yet to be considered but, then ends by stating that any business providing wholesale supplies of travel services can include these within want to. This latter statement does not suggest there will be any challenge to this decision rather, it acknowledges the decision and “suggests” the industry adopt it now before the official announcement.
Many businesses involved in the travel industry remain confused as to their status, some suffer the difficulties are providing both TAMS travel services and non-TAMS services with the administrative and high error risk this can provide.
For all travel services providers now is the opportune time to put ones house in order to ensure that services are correctly managed for VAT purposes and ensure that VAT costs are being minimised.
The VAT Practice has advised a number of travel services provides on their VAT position with some engagements resulting in significant VAT reclaims and savings made for the future. Please contact Nicholas Ryan, at or + 353238838181 for more information or to discuss your needs.

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