The Tour Operator Margin Scheme (TOMS) model is used when rentals fall under the European Tour Operator Margin Scheme (TOMS). This model applies when the customer, such as a rental agency or tour operator, acts as the travel organiser.
Under this scheme, VAT is calculated only on the margin (commission) and not on the rental income or other revenue. As a result, the owner always receives the full rental amount including VAT.
Settings
Set up the administrative method
Select this method via: Settings > Account > General > Others tab > Owner statement.
Use the following settings:
Owner statement strategy: rental in the name of intermediary.
Owner settlement commission VAT profile: NL-BTW Hoog (21%). Depends on the country in which your company operates.
Business or private owner
Next, go to Settings > Owners > Owners. For each owner, specify whether they are a Business owner or a Private owner.
Business owners receive the VAT on rental income and other income.
Private owners do not receive this VAT.
Commission VAT rate
Then go to Settings > Owners > Owner statement. Check the 'Commission VAT profile' and, if necessary, update it to the general commission VAT rate.
How the model works
Under the Tour Operator Margin Scheme, VAT is only due on the margin (commission), not on the full rental price.
As a result, the owner always receives the full rental amount including VAT. How the commission is processed depends on the VAT settings.
Examples
1. Owner (without reverse charge VAT)
When VAT is not reverse charged, the commission is deducted including VAT.
Description | Amount |
Rental income (incl. €876,44 VAT) | €5.050,00 |
Other income (incl. €41,64 VAT) | €240,00 |
Subtotal income | €5.290,00 |
Gross commission | - €916,58 |
Other costs | - €121,00 |
Total payable | €4.252,42 |
Explanation
The customer calculates and deducts the VAT on the commission.
The owner pays the full commission including VAT.
The self-billing invoice specifies the VAT amount charged on the commission.
2. Owner (reverse charge VAT)
When VAT is reverse charged, the commission is deducted excluding VAT.
Description | Amount |
Rental income (incl. €876,44 VAT) | €5.050,00 |
Other income (incl. €41,64 VAT) | €240,00 |
Subtotal income | €5.290,00 |
Net commission | - €757,50 |
Other costs | - €121,00 |
Total payable | €4.411,50 |
Explanation
The VAT on the commission is reverse charged to the owner.
The self-billing invoice states that the VAT has been reverse charged.
The owner is responsible for reporting this VAT in their VAT return.