VAT for events: what are the most important things to consider?
With many people returning to the office after a prolonged absence, most companies are starting to question whether it would be best to resume in-person meetings and corporate events, and are also looking for ways to tackle VAT on events.
Some have always preferred working in an office and are looking forward to getting back in the groove. However, all the online events that took place in the past year and a half have shown us that costs could be reduced by resorting to Zoom or other equivalents. Are online and offline events subject to the same VAT rules, though? What are the VAT implications you need to consider?
Given that VAT in the EU can be as high as 25%, the question is more important than ever.
VAT for events: what are the most important things to consider?
There are many moving parts to take into consideration. Even though hosting an event in your home country might seem more predictable, that’s often not the case. As we know, B2B sales are taxable at the customer’s location, and this includes events’ admission fees and other charges. Business customers have the right to claim back input VAT on admission fees.
Nevertheless, if your event falls into the category of artistic, cultural, scientific, and education, there is an exception to VAT rules on admission fees in most countries.
Immovable properties also follow their own set of regulations when it comes to supply services. But in that case, where do Trade Show booths stand? Again, different rules might apply.
Other expenses you may have not considered are:
- Electricity & internet
- Catering services
- Furniture renting
- Displaying elements, such as screens, tablets, projectors.
On all of those expenses, business entities can claim back VAT.
All these examples were related to domestic events, but the questions only multiply when we move on to international events. Both hosting an event in another country and hosting international guests will create complications. In order to keep costs low, you’ll want to focus your attention on handling VAT in the most efficient possible manner.
Online vs. offline events: is VAT different for digital events?
So, what about digital events?
They have proved to be effective during the lockdown, so should businesses stop hosting them?
Although they might appear simpler, tax-wise, online events are just as difficult to navigate. You’ll need to charge and remit VAT if your customers are located in the EU or UK. You need to apply VAT on all your EU B2C transactions, and use the correct VAT rate:
- The VAT rate of your country, if your annual turnover is under €10,000
- The VAT rate of the country of each customer, if your annual turnover is above the €10,000 threshold limit.
This means you should register through the OSS (One-Stop-Shop) scheme and file VAT returns for all event-related sales in the EU, or register for VAT in every country where you have customers. For B2B transactions, the EU reverse charge mechanism applies, and your customers need to account for VAT themselves.
You also need to take into consideration the fact that there are two OSS schemes, the Union and the Non-Union scheme, and use the correct one.
To tackle the complexity of VAT for events, regardless of whether your events will be held in-person or online, we advise you to use a professional invoicing service. This way, you’ll be able to focus all of your attention on marketing, logistics, and catering.
How To Calculate VAT?
To facilitate the efforts needed to calculate a VAT, Fonoa developed Fonoa Tax. The Fonoa Tax engine automatically determines the correct tax treatment for sales transactions anywhere in the world. After you provide minimal transaction data input, the tax engine will determine if the transaction is taxable, what tax rate applies, and the tax amount you need to charge for that transaction - taking into account whether the seller exceeded the relevant VAT threshold in the buyers country, and what is the product / service being transacted.
