VAT and digital events: There’s no business like post-COVID business

VAT and digital events: There’s no business like post-COVID business

The COVID pandemic has forced us all to make a lot of changes. While there is growing excitement about the prospect of being able to meet, attend events in person and to interact more freely, there is also an appreciation that online and digital events have allowed organisations to continue to operate – in some cases flourish. During the pandemic, our eyes were opened to what could be done and achieved online. It sparked imagination and resulted in exciting new ventures and opportunities. It allowed new partnerships and collaborations to develop and flourish and increased the audience and widened the geographic reach of many organisations. Digital activities are now a significant and vital part of our world and are here to stay.

As everyone knows, the world of VAT can be a confusing place and true to form it has cast a shadow over digital supplies. VAT often applies in different ways to similar situations. The same activity can be classified in different ways depending on how it is executed. The VAT classification of an activity is important as it determines where in the world that supply takes place and consequently where and what rate of tax should be recorded and accounted for. Even in the UK, admission to an event can be liable to a range of different rates of VAT. A good example of this are the VAT rules that apply to ‘in person’ and digital events supplied to individuals.

For example:

• A live event is not classified as a digital supply for VAT. This is true even if it is broadcasted live on the internet or online platforms. The place of supply of a live event is considered to be where the event takes place, or where the supplier is located – if that is the UK - UK VAT rules and procedures apply. If the event physically takes place outside of the UK, the rules of the associated country apply and the event organiser will need to consider the rules of that country and its responsibilities there.
• Conversely, if an event is pre-recorded and accessed by individuals for a charge / fee, it will be classified as a digital supply. In this case, the place of supply is where the customer downloads the online material. In practice, that means that a UK event organiser could have a requirement to register and account for VAT wherever its material is downloaded. These sales must be reported and accounted for overseas under special procedures (OSS) or where necessary, by actually registering overseas.

Just because an event takes place online, it does not mean that it is a digital supply.

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