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Margin scheme EU VAT case law

34 cases of the Court of Justice and the General Court of the European Union on this point of VAT law, from 1989 to 2026.

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Under each case, what the Court decided, from its summary. The summaries are AI-generated and are not official documents: open the case for the Court’s own text.

T-569/25 X-GmbH

Judgment · 14 October 2026 · Germany

Margin scheme and the reseller's good faith, which cannot be left to a separate equity procedure

Article 314, read with the principle of effectiveness, precludes such a practice. The assessment procedure is the one in which the authorities establish the facts of their own motion and take account of every relevant circumstance, including those favourable to the taxpayer, whereas the equity procedure examines only the grounds put forward by the reseller, depends on the authority's discretion and ends in a separate decision. Following Litdana (C-624/15), a reseller who has received an invoice referring to the margin scheme keeps the right to apply it unless the authorities show that it did not act in good faith or did not take every reasonable step to avoid taking part in fraud. Procedural autonomy allows Member States to organise how that is examined, but the practice at issue may make the right excessively difficult to exercise. The General Court points to duplicated adviser fees and court costs across two sets of proceedings, assessment litigation that has to be dismissed even where good faith would have succeeded, delays of several years because the equity decision can wait for the assessment case to end, and a burden of proof that in practice falls on the taxpayer. Whether those features are present is for the referring court to verify. Schmeink & Cofreth and Strobel (C-454/98) does not lead to a different result, because it allowed a later procedure for correcting tax invoiced in error but said nothing about the procedural disadvantages such a procedure may carry. The judgment carries the Litdana good faith protection into procedure.

C-565/24 P-GmbH & Co. KG (Coffee trips)

Judgment · 10 September 2026 · Germany

Travel agents' margin scheme, day excursions financed by on-board sales, and a negative margin

Article 26 applies where a taxable person buys tourist services from third parties, in particular transport, in order to sell them in his own name to consumers in the form of excursions, and the fee received does not cover all the costs of those services, the remainder being financed by the revenue from goods sold to those consumers during the excursion. On the third question, the first sentence of Article 12(1) and the third sentence of Article 26(2) confer no right to a refund of input VAT where the margin on a single supply is negative. The judgment settles that the margin scheme is not displaced by the fact that the travel element is sold below cost and cross-subsidised by the sale of goods during the trip, and that a margin below zero marks the limit of the scheme rather than a claim against the exchequer. Relevant to day-excursion and promotional-selling operators, and to any margin computed on a single supply.

C-433/24 Galerie Karsten Greve

Judgment · 1 August 2025 · France

Margin scheme where the artist sells through a company

The Court held that supplies to a taxable dealer by a creator or successors in title acting through a legal person do fall within Article 316(1)(b), so the dealer may opt for the margin scheme. Two conditions apply: the supply must be attributable to the creator or successors in title, which is presumed where they set up the legal person to market the creator's works, and it must be the first introduction of the works onto the EU market, with no earlier supply subject to VAT. Galleries and dealers buying from artists' marketing companies, studios or estate vehicles can now opt for the margin scheme on resale, and an assessment or dispute resting on the corporate form alone no longer stands. Relevant to French assessments and to the equivalent Article 103 reduced-rate wording.

C-180/22 Mensing II

Judgment · 13 July 2023 · Germany

Margin scheme, acquisition VAT and the profit margin

The acquisition VAT forms part of the taxable amount. "Purchase price" in Article 312(2) covers only what the dealer pays his supplier, not tax paid to the Treasury, and the VAT to be deducted under Article 315 is that on the sale itself. Fiscal neutrality and the aim of preventing double taxation cannot override clear wording, even though domestic purchases and self-imports (Article 317, second paragraph) are treated more favourably. Only the EU legislature can change this. Art and antiques dealers using the margin scheme for works acquired cross-border from creators or their successors face a higher taxable amount than on equivalent domestic purchases or own imports, because acquisition VAT is neither deductible nor a margin reduction.

C-108/22 Dyrektor Krajowej Informacji Skarbowej

Judgment · 29 June 2023 · Poland

Travel agents' margin scheme for bare accommodation resold B2B

Article 306 applies. A taxable person who buys accommodation services from other taxable persons in its own name and resells them to other economic operators falls within the special scheme for travel agents even where no ancillary services are supplied. Extending Alpenchalets Resorts beyond holiday accommodation to hotels and similar establishments, the Court noted that the multiplicity of locations itself creates the practical difficulties the scheme exists to avoid. Confirms that "no complexity" and "business customer" arguments do not remove bed banks, hotel consolidators, online booking platforms buying in their own name and corporate travel intermediaries from the margin scheme.

C-365/22 État belge (VAT – Vehicles sold for parts)

Judgment · 17 May 2023 · Belgium

Margin scheme for end-of-life vehicles sold for parts

Such vehicles are second-hand goods, and eligible for the margin scheme, provided two conditions are met: they still contain parts retaining the functionalities they had when new, so those parts can be reused as they are or after repair, and it is established that the vehicles remained in the same economic cycle through that reuse. A vehicle sold simply to be scrapped or transformed into another object does not qualify. The national court must assess objective circumstances of the resale. Vehicle dismantlers, salvage traders and insurers' disposal channels can apply the margin scheme to whole write-offs sold on for parts, not only to parts they have themselves removed (Sjelle Autogenbrug).

C-191/21 Ministère de l’Économie, des Finances et de la Relance

Order · 10 February 2022 · France

Margin scheme on resale of land, legal identity of the goods purchased and resold

Ruling by reasoned order under Article 99, the Court held that Article 392 precludes the margin scheme where land purchased as built-on land has become building land before resale. The goods purchased and resold must be legally identical. It does not preclude the scheme where land already classified as building land under national law is merely altered, such as by partitioning into lots, provided the alterations do not amount to "buildings". It is for the national court to classify the land purchased. For property dealers the classification of the land is fixed at the moment of purchase, not only at resale.

C-299/20 Icade Promotion

Judgment · 30 September 2021 · France

Margin scheme on resale of building land

The margin scheme applies where acquisition bore non-deductible VAT, and also where no VAT was charged but the purchase price incorporated input VAT borne by the initial seller. Otherwise it does not apply to acquisitions outside the scope (for example from a private individual managing private assets) or exempt. It cannot apply where land not built on only becomes building land after purchase, but partitioning into lots and connection to grids and networks does not exclude it, provided the improvements are not themselves "buildings". For developers and land traders in Member States operating the Article 392 derogation, an acquisition is tested for embedded VAT and not merely for the absence of a deduction.

C-388/18 B (Turnover of a dealer in second-hand vehicles)

Judgment · 29 July 2019 · Germany

Turnover threshold for small enterprises where the margin scheme applies

Article 288 precludes national legislation or practice calculating the reference turnover using only the profit margin. The word "taxed" qualifies the supplies, not their value, so it is enough that the supplies are taxed, however they are taxed. Turnover must be based on all amounts (excluding VAT) received or to be received. The small enterprise scheme and the margin scheme are autonomous and independent. Neither imports concepts from the other. For dealers in second-hand goods, works of art, collectors' items and antiques the small enterprise threshold is measured on gross receipts, not on margin.

C-422/17 Skarpa Travel

Judgment · 19 December 2018 · Poland

VAT on payments on account under the travel agents' margin scheme

The special scheme is not a self-contained regime. Only the rules on place of supply, taxable amount and deduction are displaced, so Article 65 applies and VAT is chargeable on receipt of the payment on account, provided the tourist services are precisely designated at that time. Where actual costs are not yet incurred or cannot be determined, the margin may be estimated from the projected total cost, taking account of costs already incurred, with adjustment once the definitive individual cost is known. For tour operators and travel agents using the margin scheme, VAT on a deposit is due as received rather than on completion of the trip, provided the trip is identifiable by destination and dates.

C-552/17 Alpenchalets Resorts

Judgment · 19 December 2018 · Germany

Accommodation-only supplies under the travel agents' margin scheme

Accommodation-only supplies bought in from other taxable persons are covered by the margin scheme, and so are such supplies combined with additional ancillary services, whatever the importance of those extras. Each is a single service under Article 307. The single supply analysis from ordinary VAT rules does not apply here. The reduced rate cannot apply, because the single travel agent service is not listed in Annex III. The Court assumed, subject to national verification, that the property owners were taxable persons. Relevant to holiday letting intermediaries, villa and chalet agencies, online accommodation resellers and tour operators buying rooms in and reselling in their own name.

C-264/17 Mensing

Judgment · 29 November 2018 · Germany

Margin scheme for works of art acquired intra-Community from the artist

The option in Article 316(1)(b) is autonomous and additional to Article 314, so Member States cannot make it conditional on the Article 314 categories. The margin scheme is therefore available on resale of works of art acquired from the creator or successors in title via an exempt intra-Community supply. But a dealer invoking the Directive directly takes the scheme on the Directive's terms. He cannot combine it with deduction of the acquisition VAT precluded by Article 322(b), even if that provision is untransposed. Art dealers, galleries and auction operators buying directly from artists or their heirs in other Member States can rely on Article 316(1)(b) to apply the margin scheme on resale, notwithstanding national rules restricting it to domestic input supplies.

C-154/17 E LATS

Judgment · 11 July 2018 · Latvia

Margin scheme and second-hand goods containing precious metals

Second-hand goods do not include used goods containing precious metals or precious stones where the goods can no longer perform their initial function and retain only the functionality inherent in the metals or stones. The item must have had, and kept, a function other than that inherent in its component materials and be usable as it is or after repair. This is for the national court to assess on all objective circumstances. Intention is, save exceptionally, irrelevant. For pawnbrokers, scrap and bullion dealers and jewellery traders relying on the margin scheme, the line runs between resales of wearable or repairable items and resales of material for recovery.

C-380/16 Commission v Germany

Judgment · 8 February 2018 · Germany

Travel agents' margin scheme excluded for business customers and applied on a global base

The Court upheld both complaints. Articles 306 to 310 do not restrict the special scheme to services supplied to final consumers, so excluding supplies to taxable persons acting for their business narrows the scheme beyond what the directive allows. And the margin must be determined by reference to each supply of travel. A global computation for groups of services or for a whole tax period is incompatible with Article 73 and with the structure of the scheme. Germany was ordered to pay the costs. The judgment that settled the customer-based reading of the travel agents' scheme against Germany and several other Member States, and it matters well beyond tour operators.

C-624/15 Litdana

Judgment · 18 May 2017 · Lithuania

Good faith and the second-hand margin scheme

Article 314 precludes refusal in those circumstances, unless the authorities establish that the taxable person did not act in good faith or failed to take every reasonable measure in his power to satisfy himself that he was not participating in tax evasion. The double reference is not obviously such as to arouse the suspicions of a prudent trader who is no VAT expert. Whether good faith existed is for the national court.

C-471/15 Sjelle Autogenbrug

Judgment · 18 January 2017 · Denmark

Margin scheme for parts salvaged from end-of-life vehicles

Such parts are second-hand goods within the meaning of Article 311(1)(1). It is enough that the property is movable tangible property retaining the functionalities it had when new and reusable as it is or after repair. Separation from the item in which it was incorporated does not matter, and there is no requirement that the goods purchased retain their identity as the goods sold. Practical difficulty in allocating a purchase price to each part cannot exclude a category of dealer. Article 318 global margin accounting is available to Member States. Vehicle dismantlers and reuse operators buying from private individuals can apply the margin scheme to salvaged parts, avoiding double taxation where no input VAT was deductible.

C-189/11 Commission v Spain

Judgment · 26 September 2013 · Spain

Scope of the travel agents' special scheme, customer-based approach

Given the divergence between language versions, the scheme must be read purposively. Articles 306 to 310 follow the customer-based approach, so it applies regardless of whether the customer is the traveller or another operator reselling the package. The remaining three complaints succeeded. Spain infringed Article 306 by excluding retail agents' own-name sales, Articles 168 and 226 by the flat 6% invoiced and deductible amount (also discriminatory as limited to services supplied in Spain), and Articles 306 to 310 by allowing a global margin per tax period. The judgment settles that the margin scheme covers business-to-business sales of packages, so wholesalers and operators selling on to other agents fall within it and cannot be pushed onto the normal rules. Relevant to tour operators, wholesalers and travel intermediaries, and to advisers reviewing legacy national margin scheme practices.

C-193/11 Commission v Poland

Judgment · 26 September 2013 · Poland

The travel agents margin scheme applies on the customer approach, not only to travellers

The Court dismisses the action as unfounded. Articles 306 to 310 are to be interpreted according to the customer based approach, so the scheme is not limited to supplies made to travellers themselves. The suggested risk that agents might apply the scheme when acting as intermediaries is not made out, since the second subparagraph of Article 306(1) expressly excludes that. Poland costs were awarded against the Commission. Decided with the parallel actions against France, Spain, Italy, Greece, Portugal, Finland and the Czech Republic, this is the judgment that settled the customer approach across the Union.

C-236/11 Commission v Italy

Judgment · 26 September 2013 · Italy

Travel agents' margin scheme, sale to another travel agent, customer or traveller

The action is dismissed. Given the divergence between the language versions, Articles 306 to 310 must be read in the light of the scheme's purpose, which is to simplify the VAT rules for travel agents and to allocate the tax on each individual service to the Member State of final consumption and the tax on the margin to the Member State of the agent. The customer-based approach serves both aims best, so the scheme applies whatever the type of customer, including an operator that assembles a package and sells it to another agent for resale. The fact that the scheme is an exception to be interpreted strictly does not justify a reading that would deprive it of its effectiveness, and the risk of agents applying it when acting as intermediaries is excluded by the second subparagraph of Article 306(1). The Commission is ordered to pay the costs. The judgment holds that Italy's customer-based application of the margin scheme is the correct reading of Articles 306 to 310, in one of the parallel infringement actions the Commission brought against eight Member States on this point. Relevant to tour operators and wholesalers selling packages to other agents for resale, and to advisers reviewing the margin scheme treatment of such sales.

C-269/11 Commission v Czech Republic

Judgment · 26 September 2013 · Czechia

Travel agents' margin scheme, traveller approach or customer approach

The action is dismissed. Given the divergence between the language versions, Articles 306 to 310 must be read in the light of the scheme's purpose, which is to simplify the VAT rules for travel agents and to allocate the tax on each individual service to the Member State of final consumption and the tax on the margin to the Member State of the agent. The customer-based approach serves both aims best, so the scheme applies whatever the type of customer, including an operator that assembles a package and sells it to another agent for resale. Article 89 of Law No 235/2004 on VAT, which lets travel agents apply the scheme to supplies to persons other than travellers, is therefore compatible with the Directive. The Commission is ordered to pay the costs. The judgment holds that the Czech Republic's customer-based application of the margin scheme is the correct reading of Articles 306 to 310, in one of the parallel infringement actions the Commission brought against eight Member States on this point. Relevant to tour operators and wholesalers selling packages to other agents for resale, and to advisers reviewing the margin scheme treatment of such sales.

C-293/11 Commission v Greece

Judgment · 26 September 2013 · Greece

Travel agents' margin scheme, customer approach or traveller approach

The action is dismissed. Given the divergence between the language versions, Articles 306 to 310 must be read in the light of the scheme's purpose, which is to simplify the VAT rules for travel agents and to allocate the tax on each individual service to the Member State of final consumption and the tax on the margin to the Member State of the agent. The customer-based approach serves both aims best, so the scheme applies whatever the type of customer, including an operator that assembles a package and sells it to another agent for resale. Article 43 of the Greek VAT Code, which the administrative circular of 10 July 1987 reads as also covering sales by one travel agent to another, is therefore compatible with the Directive. The Commission is ordered to pay the costs. The judgment holds that Greece's customer-based application of the margin scheme is the correct reading of Articles 306 to 310, in one of the parallel infringement actions the Commission brought against eight Member States on this point. Relevant to tour operators and wholesalers selling packages to other agents for resale, and to advisers reviewing the margin scheme treatment of such sales.

C-296/11 Commission v France

Judgment · 26 September 2013 · France

France was entitled to apply the margin scheme to sales to other travel agents

The Court dismisses the action as unfounded. Articles 306 to 310 must be interpreted following the customer based approach, so the special scheme is not restricted to sales made directly to travellers. The Commission was ordered to pay the costs incurred by France, and the seven intervening Member States bore their own. One of the eight judgments delivered on 26-09-2013 that settled the customer approach.

C-309/11 Commission v Finland

Judgment · 26 September 2013 · Finland

Finland was entitled to apply the margin scheme to sales to persons other than travellers

The Court dismisses the action as unfounded. Articles 306 to 310 are to be interpreted according to the customer based approach, so the scheme is not confined to supplies made to travellers. The concern that agents might apply the scheme while acting as intermediaries is unfounded, because the second subparagraph of Article 306(1) rules that out expressly. Finland costs were awarded against the Commission. One of the group of judgments of 26-09-2013 that resolved the traveller versus customer question in favour of the customer approach across the Union.

C-450/11 Commission v Portugal

Judgment · 26 September 2013 · Portugal

Travel agents' margin scheme, customer approach or traveller approach

The action is dismissed. As in the parallel cases decided the same day, the divergence between language versions means that Articles 306 to 310 must be interpreted by reference to the scheme's purpose, simplification of the VAT rules for travel agents and a balanced allocation of the revenue between Member States, which the customer-based approach achieves best. The scheme therefore covers supplies made in the agent's own name to any customer, including another travel agent reselling the package, and Decree-Law No 221/85, which applies it to operations carried out in the agent's own name vis-à-vis the customer, is compatible with the Directive. The Commission is ordered to pay the costs. The judgment holds that Portugal's customer-based application of the margin scheme is the correct reading of Articles 306 to 310, in one of the parallel infringement actions the Commission brought against eight Member States on this point. Relevant to tour operators and wholesalers selling packages to other agents for resale, and to advisers reviewing the margin scheme treatment of such sales.

C-160/11 Bawaria Motors

Judgment · 19 July 2012 · Poland

Margin scheme where the previous supplier had only partial input VAT deduction

The margin scheme is not available on such a resale. Article 314 lists exhaustively and must be construed narrowly. The exemption in Article 136(b) covers only goods on whose acquisition VAT was not deductible at all. A national restriction limiting the deductible amount is not non-deductibility. What the listed cases share is that the supplier bore the input tax in full. Resulting partial double taxation is for the national legislature to remedy, not a ground for a different reading. For motor dealers and other second-hand goods traders what decides the point is the previous owner's deduction position, not merely whether the incoming invoice is marked exempt.

C-203/10 Auto Nikolovi

Judgment · 3 March 2011 · Bulgaria

Margin scheme and goods imported by the dealer himself

The margin scheme does not apply to supplies of goods such as second-hand vehicle parts which the dealer himself imported into the EU under the normal scheme. Supply and importation are distinct, and the right to deduct import VAT removes any double taxation. Deferral of deduction under Article 320 is confined to imported works of art, collectors' items and antiques, where the dealer has a genuine option. Absent that option, no fraud risk justifies departing from immediate deduction. All three provisions have direct effect. A trader in second-hand goods importing from outside the EU applies the normal scheme to those goods and deducts the import VAT immediately under Articles 167 and 168, whether or not the goods qualify as second-hand.

C-280/04 Jyske Finans

Judgment · 8 December 2005 · Denmark

Margin scheme for leasing companies reselling second-hand cars

The exemption does not apply because since Danish law allows car-leasing businesses to deduct input tax on vehicle acquisitions, the purchase is not one on which deduction was excluded under Article 17(6), so taxing the resale is permissible even though no VAT was in fact deductible. However, the margin scheme does apply. A sale-and-leaseback undertaking is a taxable dealer where resale forms part of its normal business and the intention to resell exists at purchase, even if resale is secondary to leasing. Leasing and sale-and-leaseback companies acquiring second-hand vehicles can apply the margin scheme on end-of-lease disposals, taxing only the margin, provided resale is a normal part of the business and intended at acquisition. Relevant to asset finance, fleet and vehicle leasing businesses and their advisers, and to competition with second-hand car dealers.

C-291/03 MyTravel

Judgment · 6 October 2005 · United Kingdom

Apportioning package prices between bought-in and in-house services under the travel agents' margin scheme

An operator may recalculate under the method held to comply with Community law, subject to national repayment conditions respecting equivalence and effectiveness. Under Article 26 the in-house element must in principle be identified by market value where that can be established. Actual costs may be used only if proved to reflect the actual structure of the package. Market value is not conditional on being simpler or producing a comparable liability, is not at the taxable person's discretion, and applies to those components whose value can be established. Averages are permissible. Tour operators and travel agents supplying mixed packages containing in-house transport, accommodation or other services must treat market value as the default apportionment basis, not an election, and can no longer prefer actual costs simply because it suits the outcome.

C-320/02 Stenholmen

Judgment · 1 April 2004 · Sweden

Live animals as second-hand goods under the margin scheme

Live animals may be second-hand goods for margin scheme purposes. An animal bought from a private individual (not the breeder) and sold on after training for a specific use may therefore be treated as second-hand goods. The restrictive reading of "as it is or after repair" was rejected. It does not matter that the increase in value arises from a biological process or training rather than repair. Taxing the full sale price would produce double taxation and tax more than the value added by the dealer. Dealers in live animals, horses in particular, and riding and equestrian businesses buying from private sellers can apply margin taxation on resale even where value is added through keeping, growth or training.

C-149/01 First Choice Holidays

Judgment · 19 June 2003 · United Kingdom

Third party payments in the tour operators' margin scheme

The Court held that the margin scheme requires no derogation from the general taxable amount rule. "Total amount to be paid by the traveller" is the same economic element as consideration obtained from the customer or a third party, and cannot be read literally to exclude third party payments. Because the agent's additional payment was a condition of the operator's supply, and commission was computed on the brochure price, there was a direct link with the supply to the traveller. It was not consideration for a separate service to the agent. Tour operators using agency distribution models cannot reduce their margin by routing agent-funded discounts through a top-up payment.

C-308/96 Madgett andBaldwin

Judgment · 22 October 1998 · United Kingdom

Application of the travel agents' margin scheme to hoteliers and the split of mixed packages

The scheme applies by reference to the nature of the transactions, not the trader's formal classification, so it caught the hotelier offering return transport from distant pick-up points and an excursion in a package. Bought-in services that are traditional hotelier tasks, take up a small proportion of the price and are merely a means of better enjoying the accommodation remain ancillary and stay outside it. In mixed packages the scheme applies only to the bought-in services, and a trader cannot be required to use actual costs where market value of comparable services is identifiable. Anyone bundling third-party travel elements into their own supply, hoteliers, resorts, language schools, conference and event organisers, must test whether the bought-in element is genuinely ancillary or substantial enough to trigger the margin scheme.

C-163/91 Van Ginkel

Judgment · 12 November 1992 · Netherlands

Accommodation only supplies under the travel agents' margin scheme

The Court held that the absence of transport does not take the supply outside Article 26. Providing holiday accommodation alone can fall within the margin scheme. The condition is that the agent deals with customers in his own name and not as an intermediary, a matter for the national court on the contractual obligations, and that the accommodation provider is itself a taxable person. Tour operators are treated identically, so no separate answer was needed. Confirms that a single bought in element, typically accommodation, is enough to trigger the margin scheme, so operators cannot be pushed onto full value taxation merely because they sell no transport.

C-74/91 Commission v Germany

Judgment · 27 October 1992 · Germany

Scope of exemptions under the travel agents' margin scheme

Germany was in breach. Under the margin scheme the transactions of a travel agent form a single supply, so the only exemption available is for transactions performed outside the Community, apportioned where a journey is partly inside it. A Member State which has abandoned the general scheme in favour of the Article 26 special scheme cannot invoke the Annex F transitional exemptions for individual bought-in components. Alleged unlawfulness or practical impossibility of a directive is no defence unless the measure is non-existent, and the technical apportionment difficulties were not insurmountable. Confirms that the margin scheme is all or nothing.

C-165/88 ORO Amsterdam Beheer and Concerto

Judgment · 5 December 1989 · Netherlands

No obligation to operate a second-hand goods margin scheme

As Community law stood, nothing precluded such national legislation. There is no general principle prohibiting tax cumulation. The Gaston Schul line rested on Article 95 EEC and Kuehne on the wording of Article 6(2)(a). Harmonisation remained partial and the common system contained no basis for calculating relief on second-hand goods. Article 32 merely permits Member States already operating a special scheme to retain it. It imposes no duty to introduce one. Member States are not obliged to act in the Council's place. Historic, but the foundation of the modern margin scheme now in Articles 311 to 325.

Related topics

Special scheme for travel agents · Special arrangements for second-hand goods, works of art, collectors’ items and antiques · Discrepancies between language versions · Taxable dealers · Intra-Community supply · Right of deduction · National derogations · Building land · Harmonisation of fiscal legislation · Refund of VAT