Other Tax issues

Interlining

The 2008 Directive on the general arrangements for excise duties (2008/118/EC) came into effect on 01 April 2010. Included in Article 14 of the new directive are clear definitions of the rules applicable to duty free sales to travellers to third countries and the provisions for the continuation of sales in duty free shops on land borders with third countries until the end of 2016.

In Article 14.5(b) of the new directive, the EU agreed the following:
'traveller to a third territory or to a third country' means any passenger holding a transport document, for air or sea travel, stating that the final destination is an airport or port situated in a third territory or a third country.

Following further reflection, we believe that the legislation now in force is unequivocal and all Member States must now permit duty-free sales to travellers to a third country at their originating airport, even if they have a short transit stop at another EU airport. This is no longer a matter of interpretation. Member States may still wish to define what constitutes a transport document but an airline ticket with a final destination outside the EU should suffice.