Part 2: Virtual Events – New Rules From 2025 And The Challenges They Bring

By Daniel Voica


In part one of our series around VAT on virtual events we discussed how the pandemic has changed the way events are held, going suddenly from in person events to virtual only events during lockdowns. Streaming technology made virtual events possible but as it became widely used only during the pandemic, guidance around the VAT treatment was very limited.


When should VAT be charged on streaming fees? Should the same treatment apply to downloadable digital material and livestreams, or is the human interaction element the most  important determinator for the VAT treatment?


Of course, tax authorities and businesses streaming events or entertainment often took opposing views and it was only a matter of time until national courts and eventually the European Court of Justice had to weigh in on the correct VAT treatment.


We discussed two landmark cases, Geelen (C-568/17) and Westside Unicat Case (C-532/22) which provided more certainty around the VAT treatment for streaming events and other forms of entertainment.


However, as the outcome in both Geelen and Westside Unicat was not favourable to tax authorities in the EU, Member States decided to change the rules from 1 January 2025.


We will discuss below these new rules along with the challenges businesses will need to face in 2025.


New rules for virtual events from 1 January 2025


While the clarifications in Geelen and Westside Unicat were welcomed they also showed the existing legislation did not provide a clear set of rules to determine where virtual events should be taxed. The two cases concerned entertainment services but there are countless other different types of events and a number of exceptions and exemptions that could potentially apply.


Additionally, the decision in Geelen in particular might have been welcomed by the Dutch tax authorities but it was certainly controversial with a number of other tax authorities in the EU as it meant streams with human interaction would not be taxed in the country where the end customers were located, but in the country of the supplier (i.e. the models or agency / studio providing the service). In fact, after the decision in Geelen was published, the Romanian Authorities raised the issue of the place of supply rules for both B2B and B2C supplies with the European Commission. The matter was discussed in the 118th meeting of the VAT Committee (an advisory body of the EU) and the European Commission expressed its view that both B2B and B2C supplies [of live streaming] should be taxed at the place where the supplies are consumed (i.e. the country of the end client) rather than where the supplier is established.


The outcome in Geelen was therefore not in line with the general principles of the EU’s VAT legislation according to the European Commission and most Member States.


The will of the European Commission and the need to simplify the rules and avoid a number of other similarly complex cases prevailed, and from 1 January 2025 we will have new rules for virtual events which state:


  1. Where a virtual event is streamed to other business clients (B2B) the place of supply will be where the business client is established. It will therefore follow the general rule for supplies of services (the outcome in Westside Unicat).
  2. Where an event is streamed to clients not in business (B2C) the place of supply will be where the consumer client resides or is established (reversing the outcome in Geelen).


Challenges for virtual events in 2025


The new rules for virtual events are a step forward in clarifying the VAT treatment for these types of supplies. However, there are many other points that should be considered and hopefully addressed by the European Commission moving forward:


Switching between in person and virtual events


After the pandemic the world didn’t switch back to in person events only, instead we have a hybrid of both in person and virtual events. The lines are blurred even further as many attendees might join some sessions at an event in person and others virtually or perhaps catch up later by watching recordings.


Sometimes different pricing might be in place for in person events compared to virtual ones which may or may not also have an additional fee for access to recordings and other documentation. Others event hosts will charge just one fee that gives the attendee access to everything.


In practice it might also be possible for someone to pay for attending an in person event but then switch to a virtual presence or vice versa.


Knowing the VAT treatment for each type of supply is one thing, but switching between them and applying the correct VAT treatment might be a bit challenging for many event hosts as the chances of making mistakes greatly increases due to the complexity of having to deal with multiple VAT treatments for the same fee.



VAT rates


The new rules for virtual events were part of a broader package of amendments to the EU’s VAT legislation which also included an announcement that Member States could extend the application of reduced rates to new types of transactions. It seems that EU countries will be able to apply a reduced VAT rate to virtual events as well, not just in person ones. Some countries might decide to go down this route while others will continue to have different rates for in person and virtual events or simply keep the standard rate for both.


Navigating these rates might prove tricky, especially when the event is hybrid (both in person and virtual). Careful consideration should also be given to where the attendee is based given that the ones not in business joining virtually will need to have the VAT rate from their respective countries applied, not the one from where the event effectively takes place.


Another issue brought by VAT rate changes is around timing. Event companies start selling tickets and passes (in person and virtually) a long time before the event is due to take place. If the VAT rate goes up or down in the meantime the business will need to make sure it is charging the appropriate rate from at the right time.


If an invoice has already been raised or payment received (in full or in part) but then the VAT rate changes there will be special tax point rules that kick in. It is crucial for businesses to  be familiar with these rules and apply them as they might need to make adjustments to the amount of VAT due on their supplies.




Aside from lower VAT rates there is also the question of whether any VAT exemptions will apply.


Some EU countries apply exemptions on particular types of events (e.g. cultural events, educational events etc). Often times an application needs to be made with the tax authorities requesting the exemption, although in others it is up to the business to determine whether they meet the relevant conditions. Where attendance is in person only it would be a matter of applying for an exemption or checking rules in the Member State where the event takes place.


It is unclear if an exemption can apply to virtual events given that in most countries there are no explicit provisions around exemptions for virtual events (at least not yet). If virtual events cannot be exempt then we might have some rather peculiar situations. For example, if a client that is not in business attends an event in person, they might not pay VAT if an exemption applies. However, if they travel to the event but feel unwell and decide to watch the event from their hotel room rather than the conference room where the event effectively takes place they will be charged VAT from their country of establishment.


On the other hand, if we assume Member States will want to exempt virtual events as well (and this is a big if), then the host of the virtual event will have to check the rules in the country of the client and potentially might need to apply for a ruling in each one.


Ancillary supplies


Can virtual events be seen as ancillary to in person events (or vice versa)? This might be the case in some instances if streaming the event or having access to the recordings can be seen as a better way to enjoy the in person conference rather than a means in itself for the attendee. If that is the case, then the VAT treatment of the ancillary supply (the virtual event) will follow that of the principal supply (the in person event). But whether something is ancillary or not to another supply has always been a very contentious issue and will require a case-by-case review of the particular circumstances of that event.


Having to review whether this is the case or not for each event will be cumbersome and some additional guidance would be welcomed.


Vague definitions


The amendments to the EU VAT legislation talk about “activities which are streamed or otherwise made virtually available”. The wording used by the European Commission in this case is odd since it isn’t clear if it includes electronically supplied services. In other words, what is the difference between electronically supplied services (which have their own separate rules) and activities made virtually available? In which of the two categories do recordings fall? They seem to meet the definition of an electronically supplied services, but aren’t they also activities made virtually available? If not, then what types of activities would qualify in this category?


Applying the correct set of rules might be problematic if the European Commission doesn’t provide further details on what it meant by “otherwise made virtually available”.


Use and enjoyment


The new rules also allow EU countries to apply the so called “use and enjoyment” clause to virtual events.


The use and enjoyment rule is an optional clause that can be applied by Member States which overrides any other general rule or exception. The purpose is to tax a supply where it is effectively used regardless of where the supplier or the client are established. In theory this is a very sensible concept, but in practice it creates a lot of issues as determining where services in particular are used and consumed is always problematic. There are also some very technical discussions around what ‘using and enjoying’ a service actually means.


If this rule will be implemented by Member States, then event hosts and organisers will need to become really good at tracking where attendees are when accessing streams or recordings.


How exactly should that be achieved and what are the technical means that would make the tax authorities happy?


We don’t know yet. There is guidance on how to achieve this for electronically supplied services, but stream with human interaction do not fall in this category. As mentioned above, it’s not clear what “otherwise made virtually available” means and whether this would fall under electronically supplied or not, but we might find ourselves in a position where each country takes their own view on this matter.


What about the UK?


The UK has left the EU, therefore the changes described above will not be reflected in UK rules. Nonetheless, UK entities streaming events to EU consumers for example will need to follow the new rules in relation to EU consumers while EU entities providing services to UK consumers will follow the current UK.


If the UK does not change its place of supply rules to bring them in line with the EU ones, then in some cases, we might see consumer clients being taxed both in the UK and the EU, while in others there might not be any taxation at all.


At the moment we are not aware of any proposed changes to the rules by HMRC. The only recent update from HMRC around streaming and events comes from a Revenue and Customs Brief (RCB 1(2024)) that deals with the VAT treatment of live web streaming of funeral, burial, or cremation services. For those curious about this update, it says the supply of live web streaming of funeral, burial, or cremation services provided by an undertaker, cemetery, or crematorium operator should be treated as VAT exempt. The same service would however be taxable if undertaken by a third party for separate consideration.


For now, no further updates but we hope the potential double taxation as of 2025 will be addressed before the new EU legislation kicks in.


Get in touch


At Essentia we have a wealth of experience in working with companies in the event sector and would be very happy to help navigate the complex world of VAT and help businesses prepare for the 2025.


We can help determine if VAT is due on supplies, where supplies need to be taxed, what type of information needs to be collected from attendees generally ensure event organisers and event hosts are prepared for the upcoming changes.


Click here to read Part 1: VAT On Virtual Events And The Legacy Of The Pandemic