Collective Commentary about the New Package Travel Directive

THE PROVISIONS OF EXPLICIT TAX RELEVANCE 633 3.1. Cases of price increases Recital 33 lists and describes the cases in which price increases are possible 19 . This includes the case where there is a change in the taxes or duties imposed by third parties not directly involved in the execution of the tourist services included in the tourist package contract or in the exchange rates relevant to the package. In addition, there may be a possible price increase “only if the contract expressly provides for the possibility of such a price increase and provides that the traveller is entitled to a price reduction equal to a reduction in such costs”. This is the so-called principle of prevalence. Recital 33 introduces a new feature, stating that: “ if the organiser proposes a price increase of more than 8% (which certainly also includes the tax profiles), the traveller should be entitled to terminate the package travel contract without paying a termination fee ” . It was not uncommon for a traveling customer to pay the amount due for the holiday at the time of booking because of possible increases in taxes, fuel and exchange rate fluctuations. The new Directive provides that increases must not exceed 8% and that, in the event of an increase of more than 8%, it is possible to withdraw free of charge. Furthermore, the so-called reciprocity is introduced, i.e. if a possible increase in cost is foreseen, a possible decrease must also be established on the basis of the same parameter. To the customer should be told, and specified, that if an increase in the cost of fuel could result in an increase in the price of the package, its decrease will necessarily result in a reduction in the amount originally planned. 4. THE PROBLEM OF VAT IN THE TOURISM SECTOR Before going into the substance of VAT issues, a number of systematic profiles should be considered in advance. The issue of VAT in the tourism sector is central as it is the most important harmonized tax in the European Union and on which there have been the greatest interventions at European level 20 . It is this profile that justifies such an accentuated treatment of VAT, although, on the other hand, it should be specified that Directive (EU) 2015/2302 does not mention it. 19 On this point please refer back to note 14. 20 VAT Directive 2006/112/CE.