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Air France-KLM v Ministère des Finances et des Comptes publics

In Air France-KLM v Ministère des Finances et des Comptes publics (C-250/14 and C-289/14) (23 December 2015) the CJEU found that VAT was due on unused airline tickets.

From 1999 Air France had ceased paying VAT on the sale of tickets issued to but not used by passengers of its domestic flights. However the French tax authorities considered that the amounts relating to those tickets should have been subject to VAT at the reduced rate of 5.5% applicable to supplies of domestic passenger air transport services. Similarly Brit Air performed air passenger transport services in the context of a franchise agreement concluded with Air France-KLM and it did not charge Air France any VAT on ‘no-shows’. 

The CJEU observed that a supply of air passenger transport is subject to VAT where the sum paid by a passenger to an airline company is directly linked with an identifiable...

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