France: VAT applies on unused, nonrefundable airline tickets

VAT applies on unused air tickets in France

The Court of Justice of the European Union (CJEU) today issued a judgment concluding that value added tax (VAT) in France is chargeable on unused but nonrefundable air tickets.

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The judgment was issued in joined cases: Air France-KLM v. Ministère des Finances et des Comptes Publics  (C-250/14) and Hop!-Brit Air v. Ministère des Finances et des Comptes Publics (C-289/14)

The airlines asserted that VAT did not apply to the sale of tickets that passengers had not used and for which the passengers could not claim a refund. The French tax authorities disagreed, and made VAT assessments against the airlines.

On referral from the French Conseil d’Etat, the CJEU today concluded that VAT was chargeable on unused air tickets that are not refundable. Read a CJEU release [PDF 161 KB]


Read a December 2015 report prepared by the KPMG member firm in the Netherlands: Not every ‘no show’ leads to a VAT refund

Read a January 2016 report [PDF 28 KB] prepared by Fidal (Fidal is a French law firm that is independent from KPMG and its member firms)

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