UK suppliers planning online events or courses targeting EU audiences should be aware that EU VAT rules for virtual events have changed.

The EU classifies all types of events as services. The VAT applicable to your services depends on the service you are providing, the location of the customer, and the kind of customer you are providing the services to. For example, whether the services are Business-to-Business (B2B) or Business-to-Consumer (B2C).

The EU has amended the place of supply rules for supplies of virtual events supplied to private individuals (B2C). The change took effect on 1 January 2025. Under the new rules, VAT is no longer due where the supplier is located, but instead where the service is consumed, which is the country in which the customer is based.

This aligns virtual events with the EU (and UK) VAT treatment of electronically supplied services (ESS), requiring suppliers of B2C virtual events to account for the VAT due in the Member State of the consumer.

This means that:

1. You’ll be required to confirm which member state your customer is based in and charge VAT at their local rate. For non-EU businesses this initially gives rise to a registration obligation in each member state.
2. EU businesses can opt to use the One Stop Shop (OSS) scheme to simplify VAT reporting. OSS enables a single EU-wide registration, allowing companies to account for VAT within the EU through a single OSS return, thereby easing the compliance burden.
3. UK and other non-EU suppliers of virtual events will be able to use the Non-Union OSS mechanism. This means there is a requirement for only one VAT registration within the EU.
4. You may need to consider your pricing approach given multiple VAT rates may apply.
5. You will also need to consider how these new rules interact with the existing UK rules.

These EU VAT changes mean that suppliers will need to determine the customer’s location and may be required to provide evidence to support this treatment.

If you host virtual B2B events and online courses, there will be no changes to the VAT treatment. If you host B2C virtual events, the UK business will need to charge VAT at the applicable rate in the country where the customer resides and account for VAT to that country’s tax authorities.

A conflict between UK tax authorities and EU rules

Before Brexit, the rules in the UK would have changed in tandem with an EU rule change. However, now that the UK is no longer part of the EU, HMRC have not responded to these new VAT rules in the EU. This means that there is a conflict between UK and EU rules. Therefore, under UK VAT rules, HMRC will continue to treat certain supplies of online events as liable to VAT in the country in which the supplier is established.

If HMRC does not amend the UK rules and apply a similar change in place of supply rules, there will be a risk of double taxation. Double taxation will have a significant impact on the transaction’s profitability and will also result in additional administrative obligations for the supplier.

Summary

The rules for VAT on virtual events could now be more complex and you must establish a variety of details before charging and paying VAT. How and where you apply VAT rules will depend on your business and the type of customers you are providing services to, and the location of your customer base.

To ensure compliance, consider whether your events will require registration for VAT across Europe to comply with new EU rules. If your webinars or events do fall within the new rules, you should also consider applying for the One-Stop Shop scheme before you host your next event.

To ensure you don’t make errors or to discuss how these changes impact your business, contact us.

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