What is Tour Operators Margin Scheme?
The Tour Operators Margin Scheme allows for a simplification of the VAT treatment of travel agents’ activity.
How it works?
Firstly, concerning the place of supply, this service is taxable in the country where the travel agent is established.
Services that are included in the travel agent’s margin scheme
These are some examples of the type of services that always fall under Margin Scheme supplies:
- accommodation
- passenger transport…
Who is included and not included in the scheme?
It is important to note that, for the special scheme to apply, the tour operator must exclusively buy and resell services to the final customer:
- All the services that are part of the travel pack must have been contracted from other suppliers for the benefit of the final customer. ….
Example
Let’s imagine that a French traveler books a package holiday for a total selling price of EUR 3,000. They will spend the holidays in Spain. The package includes accommodation and some excursions.
The formula to obtain the VAT amount is = Margin x VAT rate / 100 + rate.
Source: MAROSA
