Post-calculation of outgoing VAT on entrance fee / cover charge

The case concerns the validity of a decision on recalculation of outgoing VAT calculated by entrance fees to pubs / nightclubs in connection with entertainment from troubadours and bands. The case also concerns the imposition of additional tax with 20% of the recalculated amount.

The question in the case is whether the entrance fee is to be regarded as a sale of services in connection with access to concerts and thus exempt from value added tax pursuant to the Value Added Tax Act § 3-7 first paragraph.  

Post-calculated outgoing VAT amounts to NOK 81,751 and additional tax levied amounts to NOK 16,350.

The case has been processed in the general department, where one of the board members has requested that the case be processed in a large department.

The secretariat recommends that the taxpayer’s complaint not be upheld. However, the secretariat recommends that the rate for additional tax be reduced from 20 per cent to 10 per cent due to a long stay with the secretariat, cf. ECHR art. 6.

The complaint is not accepted.

The rate for additional tax is reduced from 20 percent to 10 percent.