When a company organises an event - conference, seminar, trade fair, congress, etc. - abroad, it must in principle charge local VAT on the revenue from the registration fee charged to participants. For example, a company organising its annual conference in Germany should normally charge German VAT on its registration fees.

But this is not always the case. The answer to the question of whether VAT is due abroad is not always clear and depends on many parameters: are the participants private individuals or companies, i.e. is your company acting in a B2C or B2B context? Is it a congress focused on the education and training of its members, a trade fair or both? Does the event last for one or more days? The answer to all these questions will determine the correct VAT treatment of your event.

Insofar as local VAT is due on the admission fees charged to participants, your company will have to register for VAT in the country where the event is taking place in order to be able to fulfil a series of local VAT obligations: filing of VAT returns, specific mentions on invoices, payment of VAT, accounting records in accordance with local regulations, filing of various listings, etc. These VAT obligations are set out in Articles 192 to 278 of the VAT Directive.

There are different types of VAT identification: direct VAT registration, VAT registration with appointment of a responsible representative, possibility in some countries of simplified identification. The registration procedure can be easy or extremely complicated. Spain, for example, requires the legal representative of the foreign company to go to the notary and then to the Spanish consulate to obtain an individual tax number before the application for VAT registration of the company can be started. All documents must also be translated into Spanish and apostilled! In short, in many European countries, simply trying to register for VAT is already a real headache.

Companies sometimes prefer to delegate all the logistical work involved in organising the event to a PCO (Professional Congress Organiser): management of registrations, catering, rental of meeting rooms, flights, accommodation, etc.). The P.C.O. can act in different ways: as an intermediary (acting in the name and on behalf of your organisation), as a commission agent (acting in its own name but on behalf of your organisation) or as the organiser of the event itself when it acts in its own name and on its own behalf.

Your company should be aware of the VAT treatment applicable to its relationship with its P.C.O. The accounting method of financially matching income with the expenses incurred in organising the event is not at all in line with VAT rules. To put it another way, whatever financial commitments your organisation has with the P.C.O., these financial flows must be treated separately for VAT purposes.

The third challenge is to determine whether your company can deduct VAT on the costs of organising its event abroad. As far as foreign VAT is concerned, you will have to take into account the classic exclusions introduced by certain countries concerning, for example, food, drink or hotel expenses.

Furthermore, if your company is exempt from VAT in its country of residence, as is the case for many non-profit organisations, this could be quite costly: most of the expenses incurred in organising its event abroad will, because of the rules on the localisation of services, be subject to VAT in its country.

The above-mentioned association could very well find itself in the disastrous situation of having to pay local VAT on the right of access to its event while not being able to deduct the VAT on the related expenses!