In a circular letter issued by the German Federal Ministry of Finance dated 9 June 2021, the tax authorities adopted the ECJ case law (“Srf konsulterna”, C - 647/17) for determining the place of supply for sales of admission tickets for events pursuant to Section 3a (3) no. 5 of the German VAT Act (cf. Article 53 VAT Directive).
Accordingly, sales of admission tickets (as defined in Art. 32 and 33 of the VAT Directive) for cultural, artistic, scientific and similar events in the B2B sector are to be regarded as taxable at the respective venue – instead of applying the general place of supply rules for B2B services. In contrast to the previous view of the tax authorities, it is no longer decisive whether or not the event is generally accessible to the public. However, the regulation also requires the physical presence of the service recipient at the event location; the regulation therefore does not apply in cases of online participation by the service recipient.
The initially planned implementation of the regulations with immediate effect proved to be impossible in practice. Therefore, the tax authorities published a non-objection regulation in an additional circular letter dated 19 August 2021: For such services being supplied before 1 January 2022 which relate to events that are not generally accessible to the public,the (previous) place of supply principles valid until 8 June 2021 can be applied. However, this requires that the parties involved make use of this by mutual agreement. On the other hand, the criterion of the physical presence of the service recipient shall nevertheless be decisive also for the period of the non-objection regulation in all open cases.
In practical terms, the “venue principle” may lead to increased registration obligations in Germany.
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