EU and non-EU non-profit organizations organizing events (training, seminar, conference, annual congress or similar event) in the European Union have to deal with VAT. Managing VAT obligations correctly can help your organization to optimize its revenues. (VAT cannot be a final cost for your organization). Otherwise, non-compliant organizer faces risks involving payment of VAT (from 17 to 27%), possible penalties and late payment interests.
Event: What does it mean?
Non-profit organizations often focus on the scientific aspects of the event and entrust a P.C.O. (Professional Congress Organizer) with all the logistics work necessary for the organization of the event and its practical management (management of registrations, catering, invitation, meeting’s rooms, flights, accommodation, etc.).
P.C.O. can act under different scenarios: an intermediary [acting in the name and for the account of your organization], a commissionaire (acting in its own name but by order and for the account of your organization), an organizer (acting in its own name and for its own account), etc.
Your organization should pay attention to the VAT treatment of its relation with the P.C.O. The method consisting in solely matching revenues with expenses incurred for the organization of the event is absolutely not in line with the VAT rules. Whatever the financial commitments concluded between your organization and P.C.O. are, these operations have to be treated separately for the application of VAT. The automatic dismissal of VAT obligations of your organization by a P.C.O. is also not in line with proper regulations.
Right of admission to events such as conference and seminar is subject to VAT in the country where the event takes place (unless your event falls into the scope of educational or scientific activity exempted from VAT – specific conditions in each country must be checked). Re-invoicing of catering services, hotel accommodation costs, guide-tour, etc. is also subject to local VAT (at different VAT rates). Your organization should therefore normally be VAT registered in the country and charge local VAT.
Your organization should pay attention to local VAT rules (procedure for VAT registration in a country and declaration of local VAT vary from country to country): VAT registration process, mandatory mentions on invoices, filing periodical VAT return, books, registers and records, tax period and VAT returns, payment of VAT to local Treasury, VAT deregistration process, etc.
Many EU countries have different interpretations of the VAT rules and consider the rental of stand should be taxed in the country where the event is being organized or where the immovable good is located. Others consider that this service is taxed in the country of the recipient. Your organization should pay attention to the terms and conditions.
Non-profit organizations VAT registered in the country where the event takes place are in principle able to recover VAT incurred for the organization of the event. The right of deduction is however not absolute. VAT on some expenses is often not deductible or deductible with limitation (e.g. catering, accommodation, etc.). Furthermore, local VAT erroneously charged by local suppliers is not recoverable. Your organization should pay attention to the VAT on its costs and be advisable whether VAT is or not a final cost in order to determine precisely its profit.
Non-profit organizations [EU and non-EU] organizing events [training, seminar, conference or similar event] in the European Union must pay attention on the following issues:
- Check whether or not their event falls into the scope of educational or scientific event [exempted from VAT] as determined by the local rules of the country where the event takes place;
- If case the event cannot be VAT exempted, proceed to the local VAT registration;
- Check whether or not a local reverse charge can be applied on the registration fee invoices to local participants;
- Check the local VAT rate applicable on each element re-invoiced [registration fee, catering, etc.];
- Analyze carefully their relation with the sub-contractor in charge of all the logistic work necessary for the organization of the event;