Organization of an even abroad - What is meant by "admission"?
Your non-profit organization holds its annual congress in another European country. A registration fee is charged to participants.
But what does "admission" mean in concrete terms?
This concept, which seems very simple, is however subject to differences of interpretation between Member States and exposes your association to a VAT dispute with the tax authorities, in your own Member State or in the Member State where the event is organized. The VAT Committee has just published guidelines in that matter.
Taxation of event for VAT purposes
The supply of services consisting in giving access to educational events (seminars, congresses, professional training, etc.) provided to taxable persons by a non-profit organization is taxable for VAT purposes in the country where these events actually take place. This is a location criterion derogating from the general rule of taxation whereby a supply of services is taxed in the country of the customer (Article 53 of the VAT Directive).
Let us consider the example of a non-profit organization that holds a professional training for its members in Spain. It will have to calculate Spanish VAT on the registration fees charged to the delegates and will therefore be obliged to register for VAT in Spain.
It is still necessary to know what is meant by "giving access to an event". Following a judgment of the Court of Justice in case C-647/17 Srf, the VAT Committee has decided to take the following guidelines:
- In order to determine whether a course, seminar or conference is to be considered as an event, all the relevant elements must be examined, i.e. content, place and duration. In most cases, in order to qualify as an "event", a course, seminar or conference may not last longer than one week.
- Prior registration and payment for a course, seminar or conference is irrelevant. Therefore, it is irrelevant whether the provider knows the identity of all participants before the course, seminar or conference starts and can therefore adapt it to the needs or wishes of the licensee.
- Where a business acquires a service, which qualifies as "admission to an event", the fact that the event is attended by participants who are natural persons representing that business does not preclude the application of Article 53 of the VAT Directive.
These rules were taken almost unanimously. This means that there is still a disharmony between the Member States on what is meant by "admission" to an event.
Please also bear in mind that the guidelines issued by the VAT Committee are only the views of an advisory committee. They do not constitute an official interpretation of Community law and do not necessarily have the agreement of the European Commission. They are not binding on the European Commission or on Member States who are free not to follow them.
Source: GUIDELINES ARISING FROM THE 114th MEETING OF 2 December 2019 DOCUMENT A - taxud.c.1(2020)2254683 – 986