Flashback on ECJ cases C-163/91 (Van Ginkel Waddinxveen) – TOMS applies for Provision of holiday accommodation by a travel agent without transport

On November 12, 1992, the ECJ issued its decision in the case C-163/91 (Van Ginkel Waddinxveen).

Context: Tax provisions ° Harmonization of laws ° Turnover taxes ° Common system of value added tax ° Special scheme for travel agents ° Field of application ° Service limited to provision of accommodation ° Included

Article in the EU VAT Directive

Article 26 of Council Directive 77/388 (Article 306 of the EU VAT Directive 2006/112/EC).

Article 306
1. Member States shall apply a special VAT scheme, in accordance with this Chapter, to transactions carried out by travel agents who deal with customers in their own name and use supplies of goods or services provided by other taxable persons, in the provision of travel facilities.
This special scheme shall not apply to travel agents where they act solely as intermediaries and to whom point (c) of the first paragraph of Article 79 applies for the purposes of calculating the taxable amount.
2. For the purposes of this Chapter, tour operators shall be regarded as travel agents.

Facts

By judgment of 4 June 1991, received at the Court on 19 June 1991, the Gerechtshof te Amsterdam (Regional Court of Appeal, Amsterdam) referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions on the interpretation of Article 26 of Directive 77/388/EEC: Sixth Council Directive of 17 May 1977 on the harmonization of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p.1) (“the Sixth Directive”).
Those questions arose in proceedings between the fiscal group Beheersmaatschappij Van Ginkel Waddinxveen BV, Reis- en Passagebureau Van Ginkel BV and Others (“Van Ginkel”) on the one hand and the Inspecteur der Omzetbelasting te Utrecht (inspector of turnover taxes, Utrecht) on the other, regarding a notice of adjustment of turnover tax addressed to Van Ginkel.
Van Ginkel trades as a tour operator and also operates travel agencies. It offers its customers what its catalogue refers to as “motoring holidays”, where the customer uses his own vehicle and Van Ginkel arranges only the travel accommodation.
As regards more particularly “motoring holidays” in the Netherlands, travellers are accommodated in bungalows, most of which are owned by third parties.
The terms on which Van Ginkel may use these bungalows for its customers are laid down by agreements with the owners. Van Ginkel charges a commission equivalent to 20% of the letting price.
When the reservation is made through a travel agent other than Van Ginkel, the commission paid by Van Ginkel to that agent is between 5 and 8% of the letting price.
Value added tax (“VAT”) is calculated solely on the basis of the amount of the commission charged by Van Ginkel, from which the amount of any commission paid to another travel agent who made the booking is deducted.
The inspector of turnover tax took the view that the services provided by Van Ginkel should be regarded as a letting of holiday accommodation. VAT should therefore be calculated on the basis of the total amount of the price invoiced to the customer.

Questions

1. Where a taxable person lets holiday dwellings to customers who arrange their own transport to and from the dwellings and for that purpose enters into agreements with third parties under which the dwellings are made available to him, can such acts be regarded as the provision of travel facilities for the purposes of Article 26(1) of the Sixth Directive or as transactions performed in respect of a journey for the purposes of Article 26(2)?

2. Does the answer to the question differ if the taxable person is a tour operator and, in addition to performing the acts described in Question 1, also provides travel facilities which include transport to and from the accommodation?

AG Opinion

Article 26 must be interpreted as including transactions performed by a travel agent or a tour operator and consisting in letting to the traveller holiday accommodation belonging to a taxable third party even if the traveller provides his own transport to and from the holiday accommodation.

Decision

The provisions of Article 26 of Directive 77/388/EEC: Sixth Council Directive of 17 May 1977 on the harmonization of the laws of the Member States relating to turnover taxes ° Common system of value added tax: uniform basis of assessment, must be interpreted as meaning that the fact that the transport of the traveller is not arranged by a travel agent or a tour operator and that the latter merely provides the traveller with holiday accommodation is not such as to exclude the services provided by such undertakings from the field of application of Article 26.

Summary

Article 26 of Directive 77/388: Sixth Directive, which concerns the special scheme applicable to travel agents in the matter of imposition of value added tax, must be interpreted as meaning that the fact that the transport of the traveller is not arranged by a travel agent or tour operator and that the latter merely provides the traveller with holiday accommodation is not such as to exclude the services provided by such undertakings from the field of application of that provision.

Source