British Airways faces lawsuit from Sabre over UK digital tax reimbursement

Sabre Corp filed a $450,000 lawsuit against British Airways, claiming that the airline refused to pay the UK digital services tax under the terms of a 1991 agreement.

Sabre Corporation has filed a lawsuit against British Airways (BA), claiming that the airline failed to pay a tax related to the Digital Services Tax (DST) in the United Kingdom.

Sabre Corporation is seeking $450,000 in damages, claiming that the payment falls under a repayment clause in a commercial agreement signed between the two companies in 1991.

The case was filed in the Northern District Court of Texas, where Sabre is headquartered in the United States.

According to the lawsuit, Sabre paid $453,863 to HM Revenue & Customs as digital services tax, but claims that British Airways refused to reimburse the amount, despite contractual obligations.

Tax classification:

The Digital Services Tax, introduced in the UK five years ago, imposes a 2% tax on revenue generated by large digital companies from users residing in the UK.

In 2022, the UK tax authority explicitly stated that global distribution systems (GDS) – such as Sabre – are subject to the digital services tax, prompting the company to foot the bill.

Sabre also stated in its filing that it had attempted to resolve the dispute through negotiations over several months before initiating legal proceedings.

The company emphasized that it had filed the lawsuit “reluctantly,” given its decades-long business relationship with British Airways.

Source: TravelDailyNews