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Tax codes representing VAT

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Created by Mamta S (NIIT Technologies) on 2010-12-17 07:06:07 Back to Topics

Tax codes representing VAT

Hi,
 
I'm facing a problem regarding tax codes which are representing VAT.  e.g. CW (VAT Botswana), DN (VAT Argentina), SV (VAT El Salvador), MZ (VAT Mozambique), ID (VAT Indonesia), ZS (VAT Croatia).
 
LH and I had some discussions about those taxes. We think that it would be the best way to handle it in IS-IDEC as normal tax details and not as VAT details.
 
I asked Croatian Airlines (one of our customers) about the law in their country. The answer was “According to Croatian law VAT (ZS tax) should be shown on the Invoice in separate line”.
 
In my opinion this is not possible if we handle those taxes as tax detail.I expect it would be preferable that the industry handles those taxes in the same way, otherwise we get a mixture of same taxes handled in different ways.
 
I’m really interested how others (pilots and not pilots) are going to handle those taxes and what exactly is the point of view of IATA.
 
It would be good to receive some answers (preferable from IATA)
 
Many thanks.
 
Best regards
Oliver
(NIIT Airline Technologies)
Replied by Ashley H on 2011-01-13 17:00:33
Hi Oliver,
 
Sorry for the delay in replying to your question. We are still taking this topic up internally and also with the Revenue Accounting Working Group. I will get back to you as soon as we have a complete and confirmed response to your question.
 
Best Regards

From:
Posted: Wednesday, December 22, 2010 3:19 PM
Subject: Tax codes representing VAT

Hi,
 
I'm facing a problem regarding tax codes which are representing VAT.  e.g. CW (VAT Botswana), DN (VAT Argentina), SV (VAT El Salvador), MZ (VAT Mozambique), ID (VAT Indonesia), ZS (VAT Croatia).
 
LH and I had some discussions about those taxes. We think that it would be the best way to handle it in IS-IDEC as normal tax details and not as VAT details.
 
I asked Croatian Airlines (one of our customers) about the law in their country. The answer was “According to Croatian law VAT (ZS tax) should be shown on the Invoice in separate line”.
 
In my opinion this is not possible if we handle those taxes as tax detail.I expect it would be preferable that the industry handles those taxes in the same way, otherwise we get a mixture of same taxes handled in different ways.
 
I’m really interested how others (pilots and not pilots) are going to handle those taxes and what exactly is the point of view of IATA.
 
It would be good to receive some answers (preferable from IATA)
 
Many thanks.
 
Best regards
Oliver
(NIIT Airline Technologies)
Replied by Ashley H on 2011-01-27 13:41:34
Hi Oliver,
 
Sorry for the wait in receiving a reply to your question. We had discussed this with the RAWG and in our concurrent opinions, where a tax (regardless of the nature of that tax) is published in the TTBS/RATD under a unique tax code, the interline billing of that tax should be treated as TAX and the details broken down in the Tax Breakdown record, not on a VAT breakdown record.

Chapter A2 of RAM 2011 does not go into details about the VAT billing rules; however, it is clear about the tax billing rules (following tax codes filed in the RATD), and makes allowances for the optional VAT billing.
..........

1.8.3 Amount to be Billed
Billing of TFCs shall be based upon the amount published in the applicable IATA Industry Revenue Accounting Tax Database (RATD) which is the single source for billing interlineable TFCs.

1.8.5 Invoicing
The TFCs shall be billed to the issuing airline simultaneously and on the same coupon billing as the relative document. It must be shown in the currency of listing, separately specifying the amount of TFCs per tax code on the same transaction as the fare billing of the relative document

If a carrier includes VAT amounts in an invoice, it will have to follow the format specified in Chapter A9 Part 2, Attachment B - PASSENGER PRIME COUPON BILLING.
...........

So in summary, where a tax code has been filed and published in the RATD, it must be billed as a 'tax' (not VAT).
 
I hope this helps.
From:
Posted: Thursday, January 20, 2011 5:48 PM
Subject: Tax codes representing VAT

Hi,
 
I'm facing a problem regarding tax codes which are representing VAT.  e.g. CW (VAT Botswana), DN (VAT Argentina), SV (VAT El Salvador), MZ (VAT Mozambique), ID (VAT Indonesia), ZS (VAT Croatia).
 
LH and I had some discussions about those taxes. We think that it would be the best way to handle it in IS-IDEC as normal tax details and not as VAT details.
 
I asked Croatian Airlines (one of our customers) about the law in their country. The answer was “According to Croatian law VAT (ZS tax) should be shown on the Invoice in separate line”.
 
In my opinion this is not possible if we handle those taxes as tax detail.I expect it would be preferable that the industry handles those taxes in the same way, otherwise we get a mixture of same taxes handled in different ways.
 
I’m really interested how others (pilots and not pilots) are going to handle those taxes and what exactly is the point of view of IATA.
 
It would be good to receive some answers (preferable from IATA)
 
Many thanks.
 
Best regards
Oliver
(NIIT Airline Technologies)
 
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