Events, conferences and exhibitions are one of the business activities that may create an obligation to register for VAT in another Member State. This is because within the EU, the place of supply for a number of services related to events is generally deemed to be the Member State in which they take place. Principally these include:
- Stand rental
- Catering services
National legislation varies, and in particular, supplies of stand rental are an area where a large difference of interpretation between Member States exists.
In addition, particular attention should be given to supplies which consist of more than one component, for example sponsorship packages. In this instance, it may be that one VAT treatment can apply, or the supply may potentially require an apportionment.
Where the obligation to account for local VAT arises because of supplies in relation to an event, a VAT registration in that Member State is necessary.
VAT registration application process varies between Member States, and a difference exists in the documentary evidence required by the local tax authority, prior to approval of the application. More information on our VAT registration service can be found here.
When registering, businesses should ensure they comply with the local VAT rules in relation to the event, for example local invoicing requirements and whether the extended reverse charge applies. Accordance can assist with all local compliance requirements.
Event organisers provide a range of services in relation to the management of the event, from invoicing customers to hiring the suppliers. Normally the services of event organisation will be a general rule service, however this can depend on how the contract is set up and what obligations are imposed on each party.
Event organisers therefore need to be sure that they are applying the correct VAT liability to services they supply to their customers as the services of an event organiser will not necessarily give rise to a requirement to register for VAT in the country of the event.
Clients of event organisers will often rely on the experience of the event organiser to ensure that VAT compliance obligations are dealt with correctly, therefore it is vital for event organisers to be aware of the VAT issues that may arise for their clients.
The VAT incurred when organising an event abroad is recoverable, but may be neglected where a VAT registration is not in place. In reality, claiming this money does not have to be a stressful process.
Businesses in the EU purchasing general rule services will also need to ensure that the reverse charge is correctly applied before submitting any claim.
Claims for recovery of expenses include:
- Expenses incurred by staff such as subsistence; and
Care should be taken however, when submitting claims as each Member State has differing rules on what VAT is recoverable. It is also essential that the correct evidence is obtained in order to avoid tax authorities rejecting claims which is a common occurrence in the current financial climate.
The EU operates two schemes for VAT recovery, one for EU businesses known as the ‘EU refund mechanism’ and the other for non-EU business know as a ‘13th Directive reclaim’. There are certain requirements that business must fulfill to be able to reclaim using these schemes and you can find more information here.
The supplies a business makes in connection with an event can fall within the Special Scheme for Travel Agents. Otherwise known as the Tour Operators Margin Scheme in the UK. TOMS may well apply if a business buys in and sells services such as:
- Hotel accommodation
- Passenger transport; or
- Excursions to its clients/delegates in its own name
The supply of services that fall under the scheme are taxed differently to most supplies of services and can require a complex calculation. It is important that businesses are aware of the rules and whether they must include their supplies within the scheme. If the business activity does fall under TOMS, then adoption of the scheme is mandatory. The scheme operation involves additional compliance and reporting procedures.
TOMS will often result in a worse position for business customers who will not be able to recover the VAT.Therefore careful planning ensures the optimum VAT position is achieved at the outset.
Accordance has extensive experience in assisting businesses on where TOMS will apply. Particularly in relation to supplies made in the EU in connection with events. This can be from undertaking VAT reviews to establish the scope of TOMS in a particular country to completing TOMS calculations where required.
Contact us for more information if you think your business may fall into TOMS.
Non EU Events
When hosting an event outside of the EU – it is necessary to consider the VAT/GST or similar rules that apply in that country. Some non-EU countries will apply similar rules to the EU, possibly requiring a registration. However, often the issues will be complex. Businesses should carefully consider the organisation of the event at the outset.
VAT recovery in non EU countries will also vary. Not all countries will allow refunds to overseas businesses. More information on our non EU VAT recovery service can be found here.
Accordance has vast experience on providing VAT Advice for events in Non-EU countries. Our team is on hand to assist.