«(Sixth VAT Directive – Article 26(2) – Special scheme for the taxation of travel agents and tour operators – Taxable amount – Margin – Total amount to be paid by the traveller)»

Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Special scheme for travel agents – Taxable amount – Total amount to be paid by the traveller – Concept – Additional sum paid by an intermediate agency to the package tour operator corresponding to the discount granted by it to the customer – Included (Council Directive 77/388, Art. 26(2)) Article 26(2) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes must be interpreted as meaning that the total amount to be paid by the traveller within the meaning of that provision includes the additional amount that a travel agent, acting as intermediary on behalf of a tour operator, must pay to the tour operator on top of the price paid by the traveller and which corresponds in amount to the discount given by the travel agent to the traveller on the price of the holiday stated in the tour operator's brochure.There is therefore a direct link between that additional amount paid by a third party and the supply of the services provided to the traveller and it is thus included in the consideration for that supply received by the tour operator. It cannot be regarded as the consideration for a service supplied by the tour operator to the travel agent, consisting in providing him with a facility of selling the holiday at a reduced price.see paras 33-34, operative part

JUDGMENT OF THE COURT (Sixth Chamber) 19 June 2003 (1)

((Sixth VAT Directive – Article 26(2) – Special scheme for the taxation of travel agents and tour operators – Taxable amount – Margin – Total amount to be paid by the traveller))

In Case C-149/01,

REFERENCE to the Court under Article 234 EC by the Court of Appeal (England and Wales) (Civil Division) (United Kingdom) for a preliminary ruling in the proceedings pending before that court between

and

on the interpretation of Article 26(2) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes ─ Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1),

THE COURT (Sixth Chamber),,

composed of: R. Schintgen, President of the Second Chamber, acting as President of the Sixth Chamber, C. Gulmann (Rapporteur), V. Skouris, F. Macken and J.N. Cunha Rodrigues, Judges,

Advocate General: A. Tizzano,

after considering the written observations submitted on behalf of:

having regard to the Report for the Hearing,

after hearing the oral observations of First Choice Holidays plc, represented by K. Prosser, of the United Kingdom Government, represented by P. Ormond, acting as Agent, assisted by P. Sales, and of the Commission, represented by R. Lyal, at the hearing on 14 March 2002,

after hearing the Opinion of the Advocate General at the sitting on 12 September 2002,

gives the following

.

Observations submitted to the Court

The Court's reply

On those grounds,

THE COURT (Sixth Chamber),

in answer to the questions referred to it by the Court of Appeal (England and Wales) (Civil Division) by decision of 13 March 2001, hereby rules:

Schintgen

Gulmann

Skouris

Macken

Cunha Rodrigues

Delivered in open court in Luxembourg on 19 June 2003.

R. Grass

J.-P. Puissochet

Registrar

President of the Sixth Chamber