When organising a virtual event, it’s important to determine how this supply will be treated for VAT purposes.
Current VAT position for virtual events in Europe
For B2B delegates, the current rules mean that virtual admission is classified as a general rule service, meaning VAT is due where the customer is established.
For B2C delegates, the current rules depend on whether the virtual attendance can be considered an electronically delivered service or a general rule service. For electronically delivered services, the place of supply is where the customer normally resides and for other services, the place of supply is where the supplier is established.
In other words, online conferences and events with a host and delegates asking questions in real-time via live chat or similar have a human dimension that prevent this from being classified as an electronically delivered service which means that:
- For B2B the place of supply is where the customer is established, and
- For B2C the place of supply is where the host is established
Future position on virtual event VAT in Europe
The EU Council adopted Directive 2022/542 on 5 April 2022 declaring from 1 January 2025, the supply of a virtual event is taxable in the country where the consumer resides or is established (being a Directive, the relevant rules must be implemented by each EU Member State by 31 December 2024). The new rule will apply to all live-streamed activities.
The Italian tax authorities’ point of view
Italian tax authorities clarified in the ruling reply 409/2022 pubblicazione (agenziaentrate.gov.it), published on 4 August 2022, that the supply of training courses in ‘online’ mode are relevant for VAT purposes where the customer is established or resident, regardless of whether the customer is a taxable person or a private individual.
In the clarification to the taxpayer, Italian tax authorities referred to:
- Working Paper 1013/2021 of the VAT Committee Circabc (europa.eu), which considers that, in the case of virtual activities/events falling under the discipline of the Article 54 of Directive 2006/112/EC, the place of supply of such activities should coincide with the place where the final consumer is established and uses the service, and
- The changes made to Article 54 by the 2022/542, which stipulate that “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”
This means that the content of the VAT Directive 2022/542 seems to have already been implemented by the Italian tax authorities.
Therefore, the same supply could be subject to VAT in two different EU Member States.
How Sovos can help
Our team of tax experts can support you in understanding in which country your supply is subject to VAT in to ensure all compliance requirements are met, including registering for VAT purposes as a non-resident.