The travel agencies had until now a special VAT regime that prevented them from issuing invoices by charging the tax separately when they sold in their own name the services necessary for the realization of a trip. If the customer was the final consumer, nothing happened. But when the trip was hired by an entrepreneur, he had the right to recover this VAT after his deduction. Visit here
First of all, it should be clarified that “ The special VAT regime for travel agencies ” applies to any entrepreneur or professional who is dedicated to that activity. The conditions that must be met by the travel agency in question for the aforementioned Special VAT Regime to apply are the following:
1.- That it acts in its name to the traveler.
2.- That they use in the accomplishment of the trip, goods or services of other business people or professionals. The company limits itself to organizing the trip and does not provide personnel such as a tour guide or its hotels or restaurants.
A concrete example of the application of this special VAT regime would be the following:
This scheme would apply to an Internet portal to which the traveler pays 500 euros, and the portal organizes a 4-day trip with flight and stays in Lisbon.
In this case, the agency is responsible for buying airline tickets to the airline and hiring hotel nights with a local hotel, acting on its behalf, not on behalf of the traveler, and both the airline and the hotel come from entrepreneurs outside the web portal.
The practical operation of the special VAT Registration, in the previous example, would be as follows:
1.-The calculations are always done operation by operation.
The company enters a quarterly amount in VAT, calculated on the gross margin that is left of each trip and you can only deduct the VAT that does not correspond to what was acquired for the trip to be used by the traveler.
2.- The invoices issued under this special regime will not have to break down the VAT quota (they will be with VAT included), and therefore, the recipient of them will not be able to deduct that VAT.
If we put numbers to the previous example, the practical result would be the following:
1.- We assume a plane ticket cost of 100 euros + VAT
2.- We assume the cost of a hotel stay of 150 euros + VAT
3.- We believe operating costs of the Internet portal (maintenance, etc …) of 45 euros + VAT
To calculate the VAT charged that the company must enter into its quarterly model, the gross margin of the company in that specific operation must be calculated, since the calculation is done operation by operation, or what is the same, organized trip by organized trip of those sold by the agency. Visit here
In this case, these would be the calculations, assuming only one operation in the quarter:
Therefore, the VAT charged will be 176.86 per 21%; (176.86 x 0.21) = 37.14 euros.
As for the VAT paid, only the expenses that are not inherent to the trip can be deducted, in this case the maintenance costs, 9.45 euros (45 x 0.21). Therefore, in this example the company will enter in its quarterly VAT model 27.69 euros (37.14 – 9.45).
How to give up this special VAT regime:
The legislation allows to renounce this regime, always operation by operation, and pay in the general VAT regime, provided that the recipient of the service is an entrepreneur or professional with the right to deduction or refund of that VAT.
That is, the travel agency can sell a complete trip with this regime and then sell another one by the general regime if you give up applying it in that operation. The next trip will be sold by applying the special regime again, unless you give up, and so on.