Place of taxation for VAT purposes of services related to events
General rule for B2B services
According to the provisions of Article 14 par. 2 a) of the VAT Code (Law 2859/2000), as in force from 01.01.2010, the supply of services to taxable persons acting as such is taxed, as a general rule, at the place of establishment of the recipient of the services (general B2B rule).
Admission to cultural, artistic, sporting, scientific, educational, entertainment and similar events granted to taxable persons.
According to the provisions of Article 14 par. 8 of the VAT Code, as in force from 1.1.2011, admission to cultural, artistic, sporting, scientific, educational, entertainment and similar events which is granted to taxable persons is subject to VAT within the country, provided that these events take place within the country.
The concept of “admission” and “services ancillary thereto” has been defined by the provisions of Articles 32 and 33 of the Implementing Regulation 282/2011 of the Council of the European Union, as follows:
“Article 32
- Services in respect of admission to cultural, artistic, sporting, scientific, educational, entertainment or similar events as referred to in Article 53 of Directive 2006/112/EC shall include the supply of services of which the essential characteristics are the granting of the right of admission to an event in exchange for a ticket or payment, including payment in the form of a subscription, a season ticket or a periodic fee.
- Paragraph 1 shall apply to:
(a) the right of admission to shows, theatrical performances, circus performances, fairs, amusement parks, concerts, exhibitions, and other similar cultural events.
(b) the right of admission to sporting events such as matches or competitions.
(c) the right of admission to educational and scientific events such as conferences and seminars.
- Paragraph 1 shall not cover the use of facilities such as gymnastics halls and suchlike, in exchange for the payment of a fee.
Article 33
The ancillary services referred to in Article 53 of Directive 2006/112/EC shall include services which are directly related to admission to cultural, artistic, sporting, scientific, educational, entertainment or similar events and which are supplied separately for a consideration to a person attending an event.
Such ancillary services shall include the use of cloakrooms or sanitary facilities but shall not include mere intermediary services relating to the sale of tickets.
Cultural, artistic, sporting, scientific, educational, entertainment and similar services supplied to non-taxable persons
In addition, in accordance with the provisions of Article 14 par. 8a of the VAT Code, the place of supply of services relating to cultural, artistic, sporting, scientific, educational, entertainment and similar activities supplied to non-taxable persons is within the country, provided that these events take place within the country.
Special VAT scheme for travel agents and tour operators (“Tour Operators Margin Scheme”- “TOMS”)
In addition to the above rules, Greece also applies the special VAT scheme for travel agents and tour operators (“Tour Operators Margin Scheme”-“TOMS”), as defined in Article 43 of the VAT Code, which incorporates the corresponding provisions of Articles 306-310 of the EU VAT Directive (2006/112/EC).
Specifically, travel agents and tour operators are subject to the special VAT scheme if and to the extent that, in order to carry out the journey, they use, for the direct benefit of the travelers (customers), goods or services provided to them by other taxable persons (i.e. the scheme is not applied when the travel agents act solely as intermediaries acting in the name and on behalf of their customers and receiving a commission, but instead when they purchase the goods/services from third parties in their own name). The single service (package) supplied by the travel agent to the traveler for the purpose of making the journey (including e.g. transport services, hotel and other accommodation, food, cruises, excursions, guided tours etc.), is taxed at the place of establishment of the travel agent and the taxable amount is the profit margin realized by the travel agent after deducting from the total amount (VAT excluded) paid by the customer the actual costs (VAT included) borne by the travel agent for the goods and services that benefit the traveler directly and that were supplied to the travel agent by other taxable persons. The VAT charged on the costs of the travel agent by other taxable persons in respect of transactions subject to the special scheme are not deductible or refundable.
The special VAT scheme is a derogation from the general provisions of the VAT system as regards the place of taxation of the single supply of services, the determination of the taxable amount and the right of deduction.
According to established case law of the European Court of Justice (CJEU) (Joined Cases C-308/96 and C-94/97, C-200/04), this special VAT scheme also applies to businesses which are not travel agents or tour operators but carry out identical transactions in the context of another activity and receive services from another taxable person. It also applies not only to supplies made directly to “travelers” but also to supplies where the travel “package” is made available to another travel agent or to “customers” in general (Case C-293/11).
However, it applies exclusively to services purchased from third parties. Where a trader subject to the special VAT scheme for travel agents carries out, for a flat/single fee, transactions consisting of services supplied partly by himself and partly by other taxable persons, the special VAT scheme applies only to services supplied by third parties. The calculation of the price for the same services must be based on their market value (Joined Cases C-308/96 and C-94/97 and judgment of the CJEU in Case C-557/11).
However, it should be stressed that, according to the case law of the CJEU (C-31/10), the special scheme does not apply when travel services are not provided. It follows from the letter of the law itself that the provision of services (by the travel agent/tour operator or by another trader providing identical services) must be aimed at carrying out a journey to be covered by the scheme. In this respect, as shown in Cases C-308/96 and C-94/97, a trader should not be taxed under the special scheme where the services purchased from a third party remain purely secondary to the services provided by the trader himself, and therefore do not in themselves constitute an end for the customers, but a means of enabling them to better enjoy the main service provided by the trader himself.
In conclusion, in determining the place of taxation for VAT purposes of services related to events that are supplied to taxable persons, the following should be taken into account:
In the case of services supplied to taxable persons, the place where the event takes place is the place of taxation for the admission to the event, where the essential characteristics of the service consist of the provision of the right of entry to an event in exchange for a ticket or payment such as a subscription, season ticket or periodic payment, etc., as well as for services ancillary to the admission.
With regard to other types of supplied services, a further examination should be carried out on a case-by-case basis and all the individual elements which constitute such services should be taken into account, such as the exact nature of the services, the way they are provided and invoiced, any third-party services, etc., in order to assess in particular:
- whether they constitute a single service consisting of organization of an event which falls within the general B2B rule and is taxable at the place of establishment of the recipient of those services, or
- whether they constitute separate, individual services which fall under different rules such as e.g. accommodation services, which are taxed where the property is located, or catering services, which are taxed at the place where they are performed, etc., or
- if the services provided constitute a package of services for a single fee, are like travel services (intended to carry out a journey), in which case the individual services purchased from third parties (and not the ones supplied by the provider itself) may fall under the special VAT scheme for travel agents and tour operators.
* The information is accurate to the best of our knowledge as at the time of writing. We have no obligation to update it. We accept no responsibility against any third party who is not a client of the firm and has not signed the terms of our engagement.