Times are a-changing, but the post-COVID era is left with some legacy from the COVID period. Virtual events skyrocketed during the COVID period but nowadays still a lot of virtual events and hybrid (both physical as digital) events take place. Since the CJEU Case of Geelen there has been debate about which place of VAT supply rules apply for virtual events. What should be the correct VAT treatment of virtual events? The VAT Directive will be amended in this respect and the VAT treatment of virtual events will be further clarified. The new rules will apply from 1 January 2025. This is a welcome adjustment of these VAT rules for the eventsindustry. In comparison, currently there is still room for certain discussion on this topic.


EU Member States are required to apply the updated VAT rules from 1 January 2025. The Council of the European Commission has reached an agreement to update the VAT rules on 7 December 2021. This was adopted by the Council of the European Union on 5 April 2022. For virtual events there are some updated rules in the VAT Directive. The driver of change is to ensure taxation in the EU country of consumption.

Changes in the place of supply rules for virtual events

Considerations paid for attending events by non-taxable persons relating to cultural, artistic, sports, scientific, educational, entertainment or similar events, are subject to VAT where those activities actually take place. In case of virtual events, this has been proven to be difficult to determine due to e.g. the Geelen case. In this case, Geelen offered live interactive erotic webcam sessions where part of the organization was in the Netherlands and part of the live action took place outside the EU. In that court case the place where the activities actually took place was according the Court of Justice of the EU the place where the supplier of the services was established (i.e. the Netherlands). 

The COVID era also led to debates in terms of the taxation of considerations paid by taxable persons for attending virtual events as this was not clarified in the EU VAT legislation.

Following the proposal of the EU Commission regarding the reduced rates and live interaction sessions, clarity is provided regarding virtual events from 2025. In relation to virtual events attended by businesses, it is determined that article 53 of the EU VAT Directive is not applicable. Therefore the place of the virtual event shall be the place where the customer (business) is established for VAT purposes. In relation to virtual events attended by non-businesses, it is included in article 54 of the EU VAT Directive that VAT is due at the location where the attendee has his permanent address or usually resides. The new rules are already incorporated in the amended VAT Directive and EU Member States are required to transpose the new obligations by 1 January 2025.

Please note that the new rules apply to virtual events and not to electronic services. Electronic services are services where there is minimal to no interaction, whereas for a virtual event there is active interaction required. 

Impact 

Businesses that are involved in organizing (virtual) events should review their VAT position and determine which activities are impacted by these changes. The changes potentially lead to new VAT registrations and collecting the relevant information to determine where the B2C attendee has his permanent address or usually resides. Although the changes provide clarity, it could lead to additional burdens for these companies, especially regarding the burden of proof where the recipient has his permanent address or usually resides