Monday, 20 January 2020

TRAVEL AGENCIES VAT SYSTEM





It is a mandatory VAT system in which the tax base is determined as:




  • Travel Agencies support VAT on their purchases (goods and services). 
  • However, the part of VAT corresponding to purchases in “benefit of the traveler” is not deductable (e.g.: lodging services provided by other companies). 
  • Travel agents charge VAT in their invoices, but they do not record it separately.


REQUIREMENTS

This VAT system applies to travel agencies /tour-operators when they use goods and services provided by other companies.

Consequently, it does not apply to trips that are carried out exclusively with the travel agency’s own means of transport or lodging. In case trips were provided partly by third-parts and partly with the travel agency’s own means, it would only apply to the services provided with third-party means (DGT V3335-16).

PLACE OF EXECUTION AND EXEMPTION

Operations are considered to be carried out where the travel agency has its activity or a permanent establishment. 

TAXABLE BASE

It is calculated operation per operation, as the gross margin for the travel agency in each operation.
Notwithstanding, the General Directorate of Taxes also accepts that the travel agency declares the provisional tax base of prior year and a regularization of the tax base in the last declaration of the year (see DGT V0100-15).






For further information: http://www.fernandezbaladron.com 

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