VAT issues for events and exhibitions abroad – what should be clarified?
Will there be ticket sales?
Event management includes, among other things, the organisation of scientific conferences, fairs, banquets, exhibitions, training courses, but also more broadly festivals, dance or sporting events (e.g. athletics championships) and even entertainment events – basically any event where there is a charge for entry or participation.
For VAT purposes, it is therefore important that a ticket is needed for participation in the event.
This means that company events are excluded.
Are you selling a complex service package for the event abroad?
In some cases, the event organiser sells a complex service package, which includes various elements such as: admission to the event, travel, accommodation, catering, stand rental, equipment rental for the performance.
In connection with these activities, the event organiser may incur invoicing obligations and deduct invoice amounts.
This means that, if the legislation of the member state allows it, they can claim their expenses in the tax return and reclaim the taxes recharged to them in the invoices.
For more information on reclaiming foreign VAT, see our page .
Who is the recipient of the sale? Private individuals or natural persons – taxable persons?
The VAT treatment of an invoice issued by an event organiser also depends on whether the customer is a private individual or a taxable person, and the establishment of the customer (domestic, EU or non-EU, i.e. established in a third country) must also be considered.
Can input VAT be deducted?
In order to assess the correct tax treatment, it is necessary to examine whether the VAT charged on incoming costs incurred in relation to the organisation of the event is, depending on the national legislation in the member state concerned:
- non-deductible, or
- not fully deductible,
- or fully deductible
When is a foreign tax number required?
If a company organises events abroad, it is likely that it will need to apply for a tax number and file tax returns in the country where the event is taking place in the following cases.
- Sales of tickets to companies for the event (B2B) (e.g. a company buys tickets for its employees for the event).
- Sales of tickets to private individuals (B2C) (e.g. an individual buys tickets for an event.)
- Other local sales in another member state. (If there are any other sales by the event organiser in the member state.)
- Reclaiming VAT paid in another member state (e.g. when the company organising the event receives invoices related to the organisation of the event.)
- Foreign VAT payment on services related to real property.
In addition to the above, for events abroad, the following aspects should also be examined, considering the legislation of the member state concerned, to understand whether it is necessary to apply for a tax number in that country:
- is the company selling a package which includes other services in addition to the entry ticket or are there several separate transactions?
- is it the supply of goods or services?
- is the customer a taxable person or a private individual, domestic, EU or third country resident?
- where is the place of supply?
- what is the VAT rate in the country where the event takes place?
- who is liable to pay the tax?
- how to fulfil the tax payment and invoicing obligations (are there any other data reporting obligations)?
- can the OSS system be used for B2C transactions?
- what rules apply to VAT deduction?
Are you obliged to register for VAT abroad? Download our publication where you can find contact details of the European tax authorities, as well as the VAT specialities of each country.
DOWNLOAD THE INTERNATIONAL VAT REGISTRATION BROCHURE
VAT registration abroad – what to do?
Once the organiser of the event abroad has learned that the event organiser's activities require a tax number abroad, the process of tax registration and applying for a tax number can begin, which may vary from one member state to another in terms of time and the documents to be submitted.
It is worth thinking ahead because the tax number can take 2 weeks to 3 months to be issued; therefore, it is important to submit your registration package in good time.
Generally speaking, the documents required by the tax authorities are
- the certified extract of company data,
- tax number certificates according to the place of establishment,
- specimen signature of the acting managing director.
Our team of experts has several years of experience, and we have successfully completed several registrations.
VAT REGISTRATION ABROAD – I WISH TO CONTACT AN EXPERT
If an event organiser has a VAT registration obligation, they can reclaim the VAT and pay the tax in their local VAT return.
When is VAT registration not required abroad?
In some cases, it is possible to avoid VAT registration in a given member state by submitting VAT returns via the OSS system and paying the VAT due in that member state via an OSS return.
If no VAT registration obligation arises, the VAT can be reclaimed through the VAT refund procedure for non-resident taxable persons by submitting the ELEKÁFA form.
As shown above, there are situations where foreign VAT registration is not necessary, but it is important to bear in mind that in some cases registration is mandatory!
In some situations, it is preferable to opt for VAT liability abroad, considering the additional costs and administrative burden.
It is advisable to check whether it is necessary to apply for a VAT number in the given country before starting to sell tickets, since if VAT registration is required in the member state, invoicing must be carried out under the local tax number, based on the local invoicing rules for transactions where VAT is charged by the event organiser as a general rule.
In addition to the VAT registration and invoicing obligation in a given member state, there may also be a data reporting obligation similar to the Hungarian online invoicing system, depending on the rules of that member state.
What are the difficulties of applying for a tax number abroad?
Difficulties your business may face when organising events abroad, applying for a tax number and preparing tax returns.
1. The situation is complicated by the fact that the rules may differ from one EU member state to another, for example for the sale of tickets (whether reverse charge applies to business-to-business (B2B) sales and, if so, under what conditions). An exemption may also be possible under national legislation. However, these conditions should also be examined under the VAT legislation of the country concerned. It is also important to be aware of the national rules on deductions.
2.VAT registration procedures and the documents and information required for registration vary from country to country.
3.In other countries, VAT filing deadlines may differ, with different filing frequencies, value limits and rules.
4.Communication with foreign tax authorities.
5.Liaising with local service providers. With multiple service providers and difficult liaising, clarifying responsibilities takes a lot of time.
I WISH TO CONTACT A VAT EXPERT
Outsourcing administration can save a lot of headaches for a company expanding abroad, especially if it needs to apply for tax numbers and prepare tax returns in several jurisdictions. In this case, it is sufficient to contract with a single team of Hungarian experts and to maintain contact with a dedicated tax professional within the company. The Hungarian expert team will monitor the deadlines, prepare and file the tax returns.
