An article by Spanish VAT Services published in 2022 pointed out that determining the place of supply for VAT on online events has always been a controversial issue. Since participation in such events takes place via the internet, the event organiser and the participants could be located anywhere in the world. This circumstance can create significant complications for the determination of the VAT applicable to these services.
In this regard, articles 53 (B2B supplies) and 54 (B2C supplies) of the EU’s VAT Directive state that access to scientific, entertainment, educational, or other similar events should be taxed for VAT where the event is actually taking place. When speaking about an online event, it is not always easy to determine the place where the event is taking place. In fact, in some cases it can be tremendously complex.
We have all attended online events where speakers connect from different parts of the world to do their presentations. The same goes for attendees, who can access the event from anywhere in the world. Things can be even more complicated if it is a hybrid event in which there are onsite and online attendees and speakers. In these cases, applying the provisions of articles 53 and 54 of the VAT Directive can certainly be complicated.
Changes to the application of VAT concerning online event fees
To clarify the application of VAT to the fees paid to access these types of events, Council Directive (EU) 2022/542 introduces brief but important modifications in articles 53 and 54 of the VAT Directive, effective from January 1 2025.
With regard to Article 53 of the VAT Directive, the following text is added: “This Article shall not apply to admission to the events referred to in the first paragraph where the attendance is virtual.”
Additionally, the following text is added to Article 54: “Where the services and ancillary services relate to activities which are streamed or otherwise made virtually available, the place of supply shall, however, be the place where the non-taxable person is established, has his permanent address or usually resides.”
The above implies that the destination principle applies in the case of online events irrespective of whether the attendees are VAT-able persons.
The following shall be considered by the organiser of an online event from 2025:
If the recipient is a taxable person, the supplier does not have to charge VAT to their customer when both are established in different EU member states (VAT will be reverse charged by the customer). In the event that the supplier and the recipient are established in the same member state, the supplier must charge domestic VAT.
Where the recipient is a private individual, the taxation for VAT will be in the member state where the person accessing the event is established or domiciled, with the supplier being obliged to charge the corresponding VAT to their customer. The supplier could make use of the One-Stop Shop return.
Complications and potential VAT headaches for online event organisers
The above points to a standard situation that can certainly occur in practice in many cases, but the truth is that, as commented above, additional complications may arise in cases where a hybrid event takes place, which is now common. In this case, the service provider may need to differentiate between one type of attendee and the other. For onsite attendees, the VAT to apply will be that of the country where the event is taking place, while for online attendees, the rules described above would apply.
The situation can be even more complicated, since all the above is applicable when we refer to ‘events’. Although it may seem obvious, a priori, the truth is that this, like many things in VAT, has been the subject of discussion and controversy.
Following the European Court of Justice case C-647/17 (Srf Konsulterna), the VAT Committee agreed that these types of activities should be considered events as long as their duration is not excessive (one week is given as a guideline). In other words, the longer the duration is, the less likely it is to qualify as an event.
If we are not dealing with an event, none of the above applies and we should, therefore, apply the general VAT provisions; namely, those established in articles 44 and 45 of the VAT Directive. As we can see, when organising an online event, you must make a series of decisions if you do not want VAT to become a true headache.
VAT and online events… Who said it would be easy?
