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Place of supply for Virtual / live Streamed Events 

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On 1 January 2025 EU VAT rules change for businesses providing virtual and streaming services for conferences, distant learning and other live events streamed online (with a fee for viewing).  From 1 Jan 2025, EU countries must apply the 'where services are consumed' rule and VAT will be accountable in the country of the recipient of these services.  This change basically aligns the VAT treatment of virtual services with electronically supplied / digital services.

 

Currently the general B2C rule applies - so VAT is due the supplier's country.

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Businesses in the EU providing these services will need to update their billing systems to reflect this change so that VAT will not be applied locally. Recipients of these services will need to ensure they account for VAT locally on these services.

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Small Business (SME) VAT Exemption Scheme

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From 1 January 2025, the special VAT regime (the SME scheme) allows small enterprises to: 

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• sell goods and services without charging VAT to their customers (VAT exemption) and,

• alleviate their VAT compliance obligations.

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Small enterprises choosing VAT exemption will lose the right to deduct VAT on goods and services used to make exempt supplies.

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Who can benefit

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Any small enterprise with a total annual turnover of no more than EUR 100 000 (or the equivalent in national currency) in all Member States in the current calendar year and in the previous calendar year are eligible for the VAT exemption in its Member State of establishment (MSEST) and/or in other Member State(s) under the cross-border SME scheme. 

This is applicable only if the Member State concerned has implemented the scheme in its national legislation.

The SME scheme is optional. 

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Non-EU small enterprises cannot apply the SME scheme. In the context of the SME scheme, small enterprises established in the United Kingdom, including Northern Ireland, are non-EU small enterprises.

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New maximum for national annual threshold

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The maximum national annual threshold set by Member States under which small enterprises can VAT exempt their supplies of goods and services under the SME scheme (domestic and cross-border) is EUR 85 000 (or the equivalent in national currency).

Member States have the possibility to set more than one national annual threshold. These are called ‘sectoral thresholds’. In case a small enterprise can benefit from more than one sectoral threshold, the tax authorities will, based on its activities, inform the small enterprise about the threshold to use since only one threshold can be applied per taxable person.

 

Cross Border Application

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Small enterprises established in another Member State than where VAT is due can VAT exempt their supplies (cross-border), in the same way that small enterprises established in that Member State already can for domestic transactions. 

This will help place all small enterprises on an equal footing, whether they are based in that Member State or not. 

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 For more information please use this link - VAT rules for small enterprises

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