VAT Place of Supply in the Travel Sector

The place of supply ("PoS") rules are central to the functioning of VAT.


They identify the place at which a supply is considered to take place and it is then the responsibility of the country so identified to decide whether VAT is due, if so at what rate and how the VAT should be collected. One set of rules applies throughout the EU. The aim is to identify one PoS for each supply. Inevitably, however, there are some differences of interpretation but this is one area of VAT in which, within the EU, a reasonably harmonised position exists. Similar rules usually apply outside the EU.

The PoS rules are a difficult and complex area of VAT. This guide is intended to be only a very brief introduction to the rules. Professional advice should always be taken.

The general rules


There are different rules for goods and services. As the vast majority of transactions in the travel and events sectors comprise services, this paper is not concerned with the treatment of goods.

  • For services, there are two general, or default, EU rules: one for supplies made to business customers and one for non-business customers. For business customers, the general rule states that the PoS is the place of establishment of the customer, whilst for non-business customers, the equivalent is the place of establishment of the supplier. To make matters complicated, however, there is a list of exceptions to the general rule.
  • The PoS of a service falling within the general rule is the UK when sold to a business customer established in the UK but such a service supplied to a non-UK business client is outside the scope of UK VAT, but within the scope of the VAT system of the Member State in which the client is established. Such supplies to non-EU business clients are also outside the scope of UK VAT and may be subject to VAT in the client's country. Where a UK established supplier provides services within this general heading to a non-business customer, the PoS is (normally) the UK.
  • Where a supplier provides services with a UK PoS of supply, the UK rules determine if VAT is due. If VAT is due, a UK supplier should charge and account for VAT in the normal way.
  • When a UK supplier provides services with a PoS elsewhere, no UK VAT can be due but instead VAT in the other country is likely to be due. Where the customer is a business, it is likely that responsibility for the VAT accounting rests with the customer using the reverse charge. However, where the customer is not in business, no reverse charge is possible and the responsibility to deal with the VAT declaration rests with the supplier who may need to obtain a registration in the other country involved.

The exceptions


The general rules apply to relatively few travel services. Instead, many travel services, when TOMS does not apply, fall within the list of exceptions to the general rule. The main exceptions we are concerned with are:

  • Passenger transport - for both B2B and B2C supplies, the PoS is the place in which the transport takes place.
  • Accommodation - the PoS is the location of the accommodation, again regardless of whether it is supplied on a B2B or B2C basis.
  • Car hire and similar - the PoS is where the vehicle is put at the disposal of the customer. Again, it makes no difference whether the customer is a business or not.
  • Restaurants - the PoS is the location of the restaurant and again B2B or B2C status makes no difference. (Please note that there are specific rules for catering on board trains, ships and aircraft on international routes.)
  • Events services - where the client is a business, the PoS is determined by the general rule. Where the client is not a business, the PoS is the place where the services are physically performed.
  • Admission to attractions, theatres, football etc - the PoS of admission to an event etc is the place where the event takes place, again regardless of the status of the customer.
  • Intermediary services - here the status of the customer is important. Intermediary services supplied to a business customer fall within the general rule so that the PoS is the place of establishment of the customer (and the place where the service being arranged takes place is irrelevant). However, there is a special rule for intermediary services supplied to a non-business customer: here the PoS is the PoS of the service being arranged by the intermediary.

However, the above rules are always overridden if TOMS applies. One of the difficulties of VAT in the travel sector is determining when TOMS applies and when a service falls within one of the PoS exceptions listed above. Please see here for a guide to TOMS.

There is a PoS rule within TOMS: the PoS of any supply falling within TOMS is the place of establishment of the supplier, and the location of the services being provided does not matter.


  • 1. A supplier falling outside TOMS supplies accommodation in a hotel in Spain - the PoS is Spain.
  • 2. A UK person falling within TOMS supplies accommodation in the same Spanish hotel - the PoS is the UK and UK TOMS VAT is payable on the gross margin made.
  • 3. A UK intermediary books a room in the Spanish hotel and receives a commission from the hotel and charges a booking fee to the customer (who is a UK person). The commission is supplied at the place of establishment of the hotel, i.e. Spain. Spanish VAT is payable and it is the responsibility of the hotel to declare this VAT using the reverse charge. If the person to whom the booking fee is charged is a business, the PoS is determined by the client's place of establishment and accordingly it is the UK. Standard rate UK VAT is due. If the customer is a non-business person, the PoS is determined by the PoS of the service being organised by the intermediary. As the accommodation is in Spain, the PoS of the accommodation is Spain and this is also therefore the PoS of the booking fee.