Jan 18, 2016
From KPMG TaxWatch
The Court of Justice of the European Union (ECJ) recently held in the joined Air France-KLM and Hop!-Brit Air SAS cases (Air France-KLM) that airline “no-shows” should be subject to VAT. In both cases, the taxpayers are airline companies that offer both domestic (taxable) and international (zero-rated) flights to passengers. The airlines did not charge VAT on unused non-refundable tickets sold directly to customers. The French tax authority disagreed and issued an assessment to the airline. The ECJ noted that established case law provides that VAT is payable where a sum paid by a customer is directly linked with a service and that service is performed. The ECJ concluded
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