A woman attending a virtual event on her laptop

New EU Rules for VAT on Virtual Events

May 15, 2024 in European VAT, VAT

Are you planning events targeting EU audiences? The rules for VAT on virtual events are going to change. Starting on January 1, 2025, you need to charge VAT to your EU customers for their tickets and report these to the tax authorities on a specific return.

These changes give you two major additional admin tasks to sell tickets in the EU:

1. Confirming which member state your customer is based in and charging them their local rate of VAT

2. Reporting and paying the VAT collected to the tax authorities

You may need to register for One-Stop Shop schemes or VAT in a member state. You might have to change the way you host your event to stay compliant. The good news is that this change in the VAT rules on virtual events won’t affect everyone.

Is there VAT on Virtual Events?

In general, if you are selling something, you must apply VAT. The difficulty is working out which country’s VAT rate to apply. The EU VAT rules provide “general rules” to help you determine which Member State’s VAT rate you should apply to your sales. These rules aim to simplify the process.

The EU classifies events of all kinds as Services (as opposed to Goods). This means you need to apply the EU’s general service supply rules. They change based on whether you are selling Business to Business (B2B) or Business to Consumer (B2C).

The general rules for B2C services apply the rate of the country where you established your business. For a long time (since 2010!) these general rules have widely been applied to virtual events too.

What kind of content your business is streaming could also make a difference. Educational events might be exempt in some cases, for example.

If you’re selling pre-recorded content then this can still count as an “electronically supplied service”. Pre-recorded, downloadable/ on-demand content could be considered a TBE service and therefore may be eligible for Non-Union OSS. General service rules mean that you apply the VAT rate of the country where you based your business.

What’s changing about VAT on Online Events?

Two major VAT cases have passed through the European Court of Justice (ECJ) since 2019: Case C-568/17 (Geelen) and C-532/22, (Westside Unicat). The rulings clarified how to determine how you should charge VAT on livestreams.

Prior to these rulings, it wasn’t wholly clear which nation should charge VAT. The law was developed before livestreaming and virtual events had become widely accessible. However, the EU Commission and some Member States found the rulings weren’t in line with their intended reading of the law. The proceedings to update them and provide further clarity began shortly after the first ruling.

Starting 1st January 2025, VAT on virtual events will taxed at the rate where the consumer is based. This brings livestreams and online events in line with the rules on electronically supplied services. It also takes the EU Commission a step closer to taxing goods and services as close to the point of their consumption as possible.

A notable exception is Austria, which already requires businesses delivering B2C virtual events to Austrians to register for VAT. For example, you are a business based in UK that delivers online live masterclasses. You sell a ticket to a class to an individual based in Austria. You must register for VAT in Austria, collect VAT on the sale, and report it in your Austrian VAT return.

Do the VAT on Virtual Event changes impact me?

If you are selling tickets to a virtual event to customers in the EU you may need to register for VAT in EU countries. You will likely be affected if you are:

  • An event organizer or planner
  • An international trade association or society
  • An educational institution
  • A training provider
  • A performer, musician or speaker
  • A non-profit or charity
  • An agency
  • A website with paid membership

Creators on Patreon don’t need to worry about collecting VAT on their Patron-only livestream, however. Patreon already collects VAT based on your patron’s location.

If you host B2B events, you can continue to charge VAT at the rate of the country where your business is based. If your business is B2C, you will need to charge VAT at the rate local to your customer starting in 2025.

The rules for VAT on virtual events are not as simple as they appear, however. To determine where VAT is due, you must establish a variety of details. Before making any assumptions please seek professional advice.

Obstacle to Overcome

The regulation update is designed to make your obligations clear, however, fulfilling them now presents some practical challenges.

Some conferences and shows sell virtual tickets to real-world events so international audiences can participate at a distance. If you decide to do this, you will need to charge VAT separately on each ticket. The rate changes again if you’re selling tickets to watch the event back after it has happened.

Being transparent with your pricing (and keeping track of everything) will get increasingly complicated. In-person, virtual and on-demand tickets for the same event will have different VAT rates:

  • Based on what kind of service the customer buys
  • Where the customer buys it
  • And whether the customer is an individual

If you would typically only have one ticket that gives your customer access to everything, you should seek advice on how to apply VAT. We’re also not accounting for customers who want to change their ticket type from in-person to virtual and vice versa.

If you manage your events through a 3rd party platform like Eventbrite you might find you have to change platforms to keep compliant. This is pain if you have an established presence on the platform. Even more so if you have integrated it into your business’ systems.

Finally, there comes the work of registering for VAT in multiple countries or applying for the OSS Scheme. The amount of additional admin you have to do will only scale with the size of your event.

How do I keep compliant?

The VAT rules on virtual events change the classification of livestreams. They are changed from an “electronically delivered service” to “activities which are streamed or otherwise made virtually available”. Whilst a little vague, this definition is highlights human interaction as a distinguishing factor. How your online event will be treated will differ depending on your audience.

B2B Virtual Events
If attendees to your online event are VAT registered EU business’, the “principal place of supply” rule applies. You won’t charge the attendee VAT as the event is classed as an “Intra-Community Transaction”. Instead, you will apply the reverse charge mechanism. The attendee must self-assess the VAT due in their local VAT return.

B2C Virtual Events
When the attendees of your virtual event are individuals, VAT will be due where the attendee is established. You will need to charge the attendee VAT at their local rate. This means that you can either:

  • register for the Non-Union OSS scheme (for non-EU businesses)
  • register for VAT in the Member State where the attendee is based and file a VAT return.

The new rules for VAT on virtual events don’t come into effect until the 1st of January 2025. However, some Member States have already adopted the changes. To stay compliant you should investigate whether your events will require you to register for VAT across Europe. You can also consider applying for the One-Stop Shop scheme ahead of the changes.

Making VAT on virtual events simple

One of the major advantages of hosting events online is that they are accessible to a much larger market. Identifying attendee locations, applying the correct VAT rates, and staying compliant can be an administrative challenge. This challenge may cause some to rethink the online event format. With proper planning and professional advice, the new rules don’t have to mean the end to virtual events in the EU.

Get ahead of the curve and take our EU VAT quiz to learn how we can help you navigate VAT registrations across Europe.

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