Determining the place of supply for VAT to the admission fees to online events has always been a controversial issue. Since participation in such events is done via the internet, it is possible that the event organiser and the participants are located anywhere in the world. This circumstance creates an additional complication for the determination of the applicable VAT to these services.
In those cases where the recipient of the service is a taxable person for VAT (B2B), it is first necessary to determine whether the fee for accessing to such an event falls under the general place of supply rule (Article 44 of the VAT Directive), which would mean that the event organiser should not charge VAT to the recipients established in other EU Member States, or whether, on the contrary, the special place of supply rule applies (Article 53 of the Directive ) which states that the access to scientific, entertainment, educational or similar events should be taxed for VAT where the event takes place. In such a case, the organiser of the event must charge to the attendees the VAT rate applicable at the place where the event takes place. Something that can be difficult to determine in case of online events.
In cases where the recipient of the service is not a VAT taxable person (B2C), it will also be necessary to determine whether the general place of supply rule applies (Article 45 of the Directive), which would mean that the organiser of the event should charge VAT in the country where he is established, or whether, on the other hand, the special rule applies (Article 54 of the Directive), meaning that the access to these events must be taxed, as in the previous case, where the event takes place.
In both cases (B2B and B2C), the special place of supply rules (those included in articles 53 and 54 of the VAT Directive) would only apply if such activities can be considered as “events” and the fee paid can be considered as a price for being allowed to take part in those events.
In this regard, Council Directive (EU) 2022/542 introduces a modification in articles 53 and 54 of the VAT Directive with effects from January 1st 2025.
Article 53 (B2B supplies), as of January 1st 2025, will not apply “where the attendance is virtual“. While the new wording of article 54 (B2C) establishes that “the place of supply shall, however, be the place where the non-taxable person is established, has his permanent address or usually resides”. These modifications serve to eliminate the difficulty of determining the place where online events are held.
In accordance with the modifications introduced, the principle of taxation at destination is generalised.
This would mean that, as of January 1st 2025, the taxation for VAT of these events should be as follows:
- If the recipient is a taxable person, the general place of supply rule applies. This will imply in practice that the supplier does not have to charge VAT to his customer when both are established in different Member States.
- Where the recipient is a private individual, the taxation for VAT will be in the Member State where the person accessing the service is established or domiciled, with the supplier being obliged to charge the corresponding VAT to his customer. The supplier could make use of the OSS returns.
An additional complication may arise in cases where hybrid events take place. That is, attendees may attend in person or join online. In this case, the service provider may need to differentiate between one type of attendee and the other. For face-to-face attendees, the normal VAT rules would continue to apply, while for online attendees the new rules described would apply.
