A court in France determined that a company operating a website that allows customers to compare the rates of various car rental companies, to reserve vehicles, and to receive information and advice about car rentals was providing “travel agent” services and as such was subject to the special value added tax (VAT) regime under the “margin scheme.”
The company had requested a refund of VAT charged on the expenses incurred with respect to the rental car companies. However, the Conseil d'Etat found that the VAT changes could not be refunded because the activities performed by the company were within the scope of the special margin scheme that applies to travel agents (i.e., VAT is owed only on the margin realized, and no input VAT is deductible).
The case identifying information is: Holiday Autos UK, no. 371403 (7 December 2015)
Read a February 2016 report [PDF 45 KB] prepared by Fidal*
* Fidal is a French law firm that is independent from KPMG and its member firms.
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