For many years, the French tax administration has considered that all businesses selling a service that includes at least transport and/or accommodation should be subject to the special regime for travel agents, as long as these businesses exclusively use goods or services provided by other businesses.
The travel agent scheme is special in that it involves the application of VAT margin scheme and provides for taxation at the place of establishment of the travel agent.
In order to avoid one and/or the other, many businesses prefer to artificially break down the different services that compose the travel service and apply their own specific regime to each of them. In its Finance Bill for 2021 (PLF 2021), France plans to legislate on the concept of a single service supplied by travel agents, in order to make this artificial breakdown illegal.
Source : Assemblée nationale, Finance Bill for 2021 (in French)
