As we are all aware, The COVID-19 (Corona) virus has far reaching consequences for daily life world wide. Several EU Member States have prohibited events or public gatherings. As a direct consequence, many entrepreneurs – and specifically those who are operating in the events and leisure industry – are questioning on how to deal with the VAT treatment of cancellations and cancellation fees. In that respect, we hereby inform you as follows.

What is the VAT impact of cancellations and no shows for you as a business?

Depending on the contractual agreements and fees charged, it may be possible to obtain a full or partly refund of the VAT initially charged.

Various scenarios are possible with respect to cancellations and no shows. When a client cancels the booking for example, the initial VAT due may be (partly) replaced by a non-taxable compensation. On the other hand, for no shows without cancellation, in general VAT remains due on the total remuneration that has been agreed. The exact consequences, however, will strongly depend on the contracts and precise arrangements between you and your client.

If you any questions, please contact one of our VAT advisors who will be there to further assist.

If you would like to read more information about the financial & economic changes due to the coronavirus, please visit our special theme page about the corona virus  >>>