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VAT in the European Union
The below is a non-exhaustive guide to some of the frequent queries that arise in relation to the VAT considerations on event ticket sales and associated services in the EU. The article is for information purposes only and has been provided by CollinsGarcía. CollinsGarcía and Team Tito Limited will accept no liability for reliance placed upon same. Your own advices should be sought prior to structuring any transaction.
Charging VAT in the EU on events admissions… who charges this and where do such supplies take place for VAT purposes?
VAT is a European wide tax with its legislative foundation in European Directives. In 1977 the Council of the EC sought harmonisation of national VAT in the different member states of the EU and issued the “sixth directive”. This directive (subsequently superseded by the re-cast sixth directive) provided for uniformity of treatment from a VAT perspective across the various EU member states.
The continued desire to ensure both uniformity of treatment along with the EU’s stated objective of “modernisation and simplification of the operation of the common VAT system” led to an amendment of the sixth directive in regards to where was deemed to be the place of supply for certain transactions. Article 53 of the amended directive set out that the place of supply for the purposes of supply of cultural, artistic, sporting, educational and entertainment services would be the place where those services are physically carried out.
What does this mean for event organisers and customers?
Because the place of supply is where the “event” is actually taking place it means VAT must be charged at the applicable rate in which the event occurs. This is best outlined by way of example.
ABC limited a French Company organises an event in Spain. To comply with EU legislation Spanish VAT at the events applicable rate and not French VAT must be charged.
But what about taxable customers who are used to receiving services on the reverse charge basis?
Because the amending directive has deemed the place of supply to be the place where the event is physically being carried out, the reverse charge basis does not apply and both taxable customers as well as consumers will be charged VAT at the rate applicable in the country in which the event takes place.
How do EU taxable customers recover their VAT?
Taxable entities within the EU should claim any VAT refund entitlement through the portal of their home state tax collection agency, for example Irish Taxable entities should recover French VAT incurred through the portal of the Revenue Commissioners in the Republic of Ireland- please note however that there is often a de minimis claim level before refunds can be claimed.
And non EU entities?
The ability to recover VAT incurred by a non EU entity will depend entirely upon any reciprocity agreement that may be in force between the country in which the VAT was incurred and the Country where the non EU client is based. Additional advices will need to be taken if this scenario applies.
What about the VAT charges in relation to expo booths and advertising at events?
The amended directive which stipulates that the place of supply will be deemed to be where the event physically takes place does not extend to expo booth and advertising services. Such services are dealt with under the standard place of supply of services rules, taxable entities being charged VAT at the rate applicable where the person receiving the expo booth or advertising service is based. Again this can be demonstrated by example:
XYZ limited, a German Company sells advertising space to ABC limited who are based in Italy. XYZ should (being first satisfied as to the taxable status of ABC) supply this service on the Reverse charge basis with ABC self-accounting for the VAT in Italy.
VAT exempt services
To the extent that the provision of VAT exempt services arise, no VAT considerations arise by virtue of the exemption of the service being provided.
CollinGarcía Taxation is a specialised Tax, Insolvency, Advisory and Financial Services firm.