STEP 1 OF 3
Personal information
Side Tab Form
"*" indicates required fields
New place of supply rules have been clarified for interactive virtual events. In essence, these changes apply to all interactive virtual events or alternative live-streamed events that do not qualify as electronic services. The change means that the VAT treatment of virtual events will be aligned with the VAT treatment of electronically provided services.
So how does the changed place of supply rule impact your business? Here’s what you need to know to ensure compliance.
Physical events, like conferences and seminars, are known to be taxable in the applicable EU member state where the event takes place. However, virtual events have been trickier to navigate as physical presence is separate from a specific EU member state. Establishing a VAT treatment proved challenging for local tax authorities and courts.
However, on 5 April 2022, the EU Council adopted Directive 2022/542, which confirms the VAT treatment of live-streamed virtual events. The directive confirms that starting from 1 January 2025, the supply of virtual events is taxable in the country of residence of the consumer or where the consumer is established.
Regarding VAT purposes, live virtual events no longer classify as an electronically delivered service. This is because live virtual events generally require human intervention. Delegates are generally allowed to ask questions in real time, and this human element excludes the possibility of it being classified as an electronically delivered service. Thus, virtual events require their own VAT treatment regarding the place of supply.
Pre-recorded events can still qualify as an electronically supplied service and are subject to the VAT in the country where the consumer resides under general VAT rules.
However, the new rule applies to virtual events streamed or made virtually available, and VAT treatment differs depending on whether it is supplied as a B2C or B2B transaction.
B2C Transactions:
The virtual event will be taxable for EU VAT purposes where the recipient of the services is established. Therefore, the host will charge VAT according to the attendee’s location.
The implications of the change:
In terms of B2C transactions, activities that are streamed or otherwise made virtually available, the place of supply will be where the customer is established.
B2B Transactions:
The new directive states that the rule for in-person events does not apply to events “where the attendance is virtual.” Therefore, the principal place of supply rule will apply to virtual events. In a cross-border transaction, no VAT will be charged. In this case, the service provider will apply the reverse charge mechanism. Subsequently, the recipient will be required to self-assess the VAT due in its individual local VAT return.
The implications of the change:
VAT treatment largely remains unchanged. However, the place of supply rule for in-person events does not apply to virtual events.
Member states are required to publish and adopt new laws by 31 December 2024. This includes successfully making administrative provisions for the new rules to come into effect from 1 January 2025.
The new VAT treatment in the EU concerning virtual events may significantly impact non-EU businesses that focus on supplying virtual events. From their perspective, many VAT legislations stipulate that these types of services are taxable where the event is hosted. Consequently, if VAT is now also taxable in an attendees resident country, this could lead to double taxation.
For your business to comply with the latest updates regarding VAT taxable on virtual events, you must be informed throughout the changing process and adapt your services accordingly. To avoid non-compliance and to stay ahead of changing legislation, it’s always better to be backed by experts in the field.
Take care of your VAT compliance so you can focus on growing your business without increasing your exposure.
Find your complete global VAT compliance solutions here.
Spain’s e-Invoicing Landscape Changes Again: VERI*FACTU Postponed as Mandatory B2B e-Invoicing Moves Towards October 2027 Spain has taken two important steps in the development of its digital invoicing framework. On the one hand, the Ministry of Finance has announced plans to postpone the outstanding obligations under the invoicing software rules commonly associated with VERI*FACTU until […]
Can You Reclaim VAT on Corporate Events When Family Members Are Invited? Most finance teams already know that VAT on staff entertainment is a complicated area. What is less well known is what happens when a corporate event extends beyond employees to include their families. Does inviting partners and children to a company away day […]
Where did that invoice go? Sage Intacct customers won’t have to ask anymore Every finance team that sells across borders knows the feeling. You’ve issued the invoice, the work is done, and now you wait. Did it arrive? Did the local tax authority accept it? Is it sitting in a queue somewhere waiting to be […]
eezi by VAT IT and Consilio.io: SAP Concur e-Invoicing Partnership Every Business is Also Somebody Else’s Supplier A finance team running SAP Concur usually thinks of e-Invoicing as an incoming problem. A supplier issues something and Concur Invoice has to make sense of it. But that same business is also a supplier to somebody […]
When You Need an Intra-Community VAT Number and How to Get One If your business buys or sells goods and services across EU borders, intra-community VAT is something you will need to understand. It is not the same as domestic VAT, and the rules around registration, invoicing, and reporting work differently from what most businesses […]
5 Top AI-Powered Tax Compliance Tools Tax compliance software has come a long way and what used to mean basic automation now includes machine learning, smarter data processing and tools that can spot problems before they become expensive. The category has a new name: AI-powered tax compliance. For finance and tax teams managing tax […]
This webinar explains how US businesses can identify and recover foreign VAT, breaking down key concepts like reciprocity and showing where refund opportunities are often missed.