- On January 1, 2025, the EU changed the place of supply rules for virtual events.
- VAT is now due in the country where the customer is located, not where the supplier is located.
- This change aligns virtual events with the EU VAT treatment of electronically supplied services.
- Suppliers must account for VAT in the consumer’s Member State.
- The new rules create practical issues for suppliers, such as determining the customer’s location and providing supporting evidence.
- EU-based suppliers can use the Union One Stop Shop (OSS) to simplify VAT compliance.
- Non-EU suppliers can use the Non-Union OSS mechanism.
- UK suppliers must account for VAT in the EU country where their customer is located.
- UK rules conflict with EU rules, leading to double taxation for UK suppliers of virtual events to EU customers.
- EU suppliers of virtual events to UK customers will not be taxed.
- The UK has not changed its VAT rules, creating a conflict with EU rules.
- The UK’s failure to align its rules with the EU’s may be deliberate, but there has been no clarification.
- If the UK changes its rules, it could benefit from collecting VAT on supplies of virtual events by non-UK suppliers and relieve double taxation for UK suppliers.
- HMRC has contacted non-UK suppliers of ESS who are not registered for UK VAT.
- If the UK changes its rules, non-UK suppliers will need to register for UK VAT.
Source: crowe.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
