If you’re a UK or other non-EU business running virtual events for EU-based customers, you need to be aware of changes to the EU’s VAT rules from 2025.
What’s changing?
As of 1 January 2025, for virtual events, VAT will be due based on EU customer location.
The term ‘virtual events’ covers the business-to-customer (B2C) supply of educational and similar events which involve human intervention such as live presenters. This includes webinars, livestreamed conferences and similar online tuition. Businesses based in the UK and other non-EU countries will be affected.
The changes bring live virtual events into line with the existing VAT rules for electronically supplied services.
Until now, the VAT place of supply was considered to be where the supplier is located, so no local VAT was due on such supplies.
As an example of how the new rules apply: a UK business that provides an online class to a customer in Germany will now be expected to account for German VAT because the location of the consumer is Germany.
For an individual country, accounting for VAT will entail:
1. Confirming the EU member state where your customer’s based and charging them their local rate of VAT
2. Reporting and paying the VAT collected to that member state’s tax authority
Accounting for VAT across multiple EU countries
If attendees are from more than one EU country, HMRC’s Non-Union One Stop Shop (the OSS) can avoid the need for a separate VAT registration for each of those countries.
The OSS allows a non-EU business to register in an EU country of their choice and account for VAT based on the location of consumers. Currently VAT rates vary in the EU between 17% and 27%. Under the OSS, the supplier would pay all the VAT to the tax authority in the country they register in, and this tax authority will transfer the relevant amount of VAT to the appropriate tax authority.
Generally, for non-EU suppliers there is no minimum threshold for VAT registration purposes in EU states. This nil registration threshold means that in theory, for €1 worth of sales to EU consumers, a UK supplier would need to register for the non-union OSS in the EU. We recommend seeking professional advice to clarify your business’s position.
No changes to business-to-business supplies
The EU VAT changes do not impact B2B supplies of online events. Where customers are VAT-registered in the EU, a UK supplier will not need to account for EU VAT.
However, the UK supplier will need to ensure that they have evidence that customers are in business. In most cases this will mean collecting customers’ EU VAT numbers and retaining these on file.
No changes to related UK VAT rules… but challenges for UK businesses
For many virtual events provided by a UK supplier, HMRC may still take the view that UK VAT applies, in addition to EU VAT. This could result in a case of double taxation, creating an unfair position for UK businesses.
Until HMRC clarify the VAT treatment, the position for UK suppliers of such B2C services remains uncertain.
In contrast, an EU supplier making B2C supplies of virtual events to UK consumers may have no requirement to charge any VAT at all. This is because under the EU rules, the supplier doesn’t need to charge EU VAT; while under UK rules, the place of supply is where the supplier is located.
How BKL can help
Our specialist VAT team are experienced in helping businesses of all sizes to understand their UK VAT and international VAT obligations. We can help you to update your processes in line with the new rules, including OSS registration: keeping you compliant and giving you peace of mind.
Contact us today for a chat about the new EU VAT rules and their potential impact on your operations.