Charlotte Brown (Quorum Tax Chambers) considers a recent CJEU judgment confirming that VAT is due on unused air tickets.
Having always been taught that VAT is a tax on consumption the CJEU judgment in Air France-KLM and Hop!-Brit Air SAS v. Ministère des Finances et des Comptes publics (Cases C-250/14 and C-289/14) (reported in Tax Journal 5 February 2016) holding that unused non-refundable domestic airline tickets attract VAT appeared at first glance to be counter-intuitive; how can there be a charge to VAT where ostensibly the customer has not ‘consumed’ anything?
In KLM the taxpayer argued that payments in such circumstances should be treated as compensation and therefore outside the scope of VAT. However the CJEU held that the payments were consideration for a right to benefit from the airline’s obligations under a transport...
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Charlotte Brown (Quorum Tax Chambers) considers a recent CJEU judgment confirming that VAT is due on unused air tickets.
Having always been taught that VAT is a tax on consumption the CJEU judgment in Air France-KLM and Hop!-Brit Air SAS v. Ministère des Finances et des Comptes publics (Cases C-250/14 and C-289/14) (reported in Tax Journal 5 February 2016) holding that unused non-refundable domestic airline tickets attract VAT appeared at first glance to be counter-intuitive; how can there be a charge to VAT where ostensibly the customer has not ‘consumed’ anything?
In KLM the taxpayer argued that payments in such circumstances should be treated as compensation and therefore outside the scope of VAT. However the CJEU held that the payments were consideration for a right to benefit from the airline’s obligations under a transport...
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