2011 has brought with it a change to the German place of supply rules for event-related activities. If supplied to business customers, such activities are taxable at the recipient's place of business. In accordance with the European VAT Directive, it will only be in respect of the admission to an event that the place of supply will remain where the event takes place. Due to this new differentiation the term admission to an event" needs to be analyzed.
Admission to events
In reaction to the amendment of Art. 53 of the European VAT Directive, "the place of supply" rules for supplies carried out to business customers for events have changed. These new rules became effective in Germany as from January 1, 2011. Only with regard to the right of entry to events will the place of supply rules remain unchanged. Therefore, the question arises as to how the scope of "admission to an event" should be determined.
Until December 31, 2010, supplies in connection with events were taxable in the country where they were actually rendered regardless of whether they were supplied to a business customer (B2B) or to a private individual (B2C). Besides cultural, artistic, scientific, educational, sporting and entertainment supplies, similar supplies, including the majority of the supplies carried out in connection with fairs and exhibitions, were also defined as supplies in connection with events according to sec. 3a para 3 no. 3 lit. a of the German VAT Act. The admission to events fell within the scope of this provision. This meant that German VAT had to be charged to all attendees and exhibitors if the event took place in Germany, regardless of where the country of the organizer was located and of whether the attendee/exhibitor was a business or a private individual.
2.1 Supplies to private individuals (B2C)
The VAT treatment of supplies in connection to events will remain the same in 2011 where the said supplies are carried out to private individuals. These supplies are taxable where they are actually rendered (sec. 3a para 3 no. 3 lit. a of the new German VAT Act). This means that the organizer still needs to be registered for VAT in Germany regardless of where they are located and that they are required to charge German VAT to private individuals attending the event.
2.2 Supplies to business customers (B2B)
As of 2011, supplies to business customers and corporate bodies which do not carry out a business but which...