Germany referred to ECJ travel agents VAT

The Directive provides a compulsory Tour Operators Margin scheme (TOMS) VAT simplification for travel agents buying and reselling holiday packages across the EU. It enables agents to avoid the obligation the VAT register in each EU state where they are reselling packaged holidays. Instead, they set a profit margin which is used to calculate the VAT due, and is payable only to the member state where they are established.

The aim of TOMS is to reduce VAT registrations, and ensure there is no distortion to competition. It is obligatory for agents selling to consumers and businesses.

Presently, Germany only provides the scheme for sellers to consumers, which is in contrast to several ECJ rulings. The German margin calculation also differs from the Directive.