Check your German VAT registration: German Tour Operator Margin Scheme not in line with EU rules

01 Mar 2018
Check your German VAT registration: German Tour Operator Margin Scheme not in line with EU rules

Are you a non-German travel organiser or travel agent? Are you VAT registered in Germany? If so: Pls. check, whether this still is necessary!

Travel Services in general do not follow the regular rules of VATaxation. VAT is not charged on the selling price, but the tour operator has to calculate VAT on the margin, which means a reduced assessment basis. On the other hand, no input VAT reclaim is possible. Place of supply for such services is, where the tour operator has established his service; so the neither the general place of supply rule nor the rules valid for particular services of the total package (like passenger transportation or restaurationsumsätze) apply. This is named as Tour Operator Margin Scheme or TOMS.

By following the EU rules, TOMS includes both, travel services to private individuals (B2C) and business customers (B2B), if the conditions of the schemes are given.

This was seen different in Germany: The German VAT Act (§ 25 UStG) foresees still, that TOMS does not apply with respect to B2B-services. The result was critical: In Germany, travel services B2B are VATaxed by following the general rules valid for the particular services, whereas TOMS in other EU-member states followed the EU rules. In consequence, a double taxation was possible 

-in Germany based on the general rules leading to a German VAT registration under certain circumstances

-in other EU-member states because of national TOMS.

Now, European Court of Justice (C-380/16) has decided in a trial of the European Commission against Germany, that Germany is wrong: TOMS includes also travel services supplied B2B. This will lead to the result, that Germany will have to change the German VAT Act by following this opinion – and that foreign travel organisers and agents now have to check: 

Is it still necessary to be VAT registered in Germany?


For more information, contact Lutz Meyer from the HLB Indirect Tax Group This email address is being protected from spambots. You need JavaScript enabled to view it. 

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Lutz Meyer Lutz Meyer

Treuhand Oldenburg GmbH
Phone: +49 (0)441 9710 123

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