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http://www.traveldailynews.com/pages/show_page/20806 printed on Friday, January 09, 2009

TAXATION___


Revision of Article 26 of the 6th VAT Directive: margin taxation scheme

Since the Commission’s adoption of the Directive proposal amending Directive 77/388/EEC as regards the special scheme for travel agents in February 2002, Member States were unable to reach agreement over the so-called opt-out clause, allowing travel service providers to apply the normal VAT arrangements in business-to-business transactions. The Directive proposal has not been included in the work programme of the Irish Council Presidency nor is it likely to be taken up under the next Dutch Council Presidency, both countries currently enjoying a derogation from Article 26.

The European Commission may decide to take back its proposal and start infringement proceedings against those Member States, which do not correctly apply the Community provisions laid out in Article 26.

ECTAA has always supported the initial Directive proposal as adopted by the Commission in February 2002, but could not accept a number of changes introduced by the Council, notably the suppression of the opt-out clause. ECTAA will continue to work on a solution that may be acceptable to the trade as well as the Member States.