Place of supply of event admission services – what has changed in VAT regulations from January 1st, 2025?

At the beginning of 2025, changes to the regulations regarding the place of taxation of services provided virtually or transmitted, as well as services related to this type of activity, entered into force.  The amendment is an attempt to keep up with the dynamically changing socio-economic reality, including, above all, progressing digitalization.

The amendment to the VAT Act is an implementation of the amended EU Directive 2006/112, aimed at harmonizing VAT regulations within the EU and ensuring taxation of services at the place of their actual consumption. Let’s check what changes the New Year has brought and what significance they will have for entrepreneurs.

Place of supply of event admission services

So far, admission services to cultural, artistic, sports, scientific, educational, entertainment, etc. events, as well as auxiliary services related to them were subject to taxation in the place where the events actually took place, regardless of whether the purchaser was a taxpayer or not. From January 1st, 2025, this rule has not changed, except that events where attendance is virtual are excluded. And since the legislature has not provided specific regulations for the latter, the general rule from art. 28b of the VAT Act applies. Consequently, the place of taxation of virtual entry to events services provided to taxpayers is the place where the taxpayer who is the recipient of the service has his registered office.

The change also covered services in the field of culture, art, sports, science, education, entertainment and similar, as well as services ancillary to these services, provided to non-taxable persons. So far, they used to be subject to taxation in the place where the activity was actually performed. Currently, this rule remains in force, except for situations in which the above-mentioned services relate to activities that are transmitted or otherwise made available virtually. For such situations, the legislature equated the place of taxation with the place of registered office, permanent residence or usual place of residence of the non-taxable service recipient.

Optional amendments that the Polish legislature has not implemented

The Directive also granted Member States the right to introduce specific rules for determining the place of supply in relation to services (including ancillary ones) relating to activities transmitted/made available virtually, i.e. to recognize that these services are taxed in a place other than the place of their supply if in that their actual use and exploitation takes place elsewhere. This solution may be introduced to prevent double taxation, non-taxation or distortion of competition. However, the Polish legislature did not notice such a risk and, in the current legal situation, did not decide to use the above-mentioned. right.

The importance of the changes

The new rules for determining the place of supply of services certainly respond more effectively than the current ones to the challenges related to the ongoing digitization of the economy. According to the rules in force until the end of 2024, the taxpayer providing admission services to events was obliged to tax them in the place where they actually took place. In the case of events broadcast online it was often difficult to determine the place of supply, as those events where attended by people from various places in the world. Consequently, this created opportunities for abuse. This could also create a risk of distortion of competition in a situation where the taxpayer moved the venue of the event to a third country or a country with a lower applicable tax rate. Therefore, the presented solution also serves a sealing function and is a response to the movements of taxpayers who have redirected the location of events from a place where such a service would be provided traditionally, to a place justified mainly by tax optimization. That kind of movements have been emerging since the COVID-19 pandemic.

The new rules for determining the place of supply do not only prevent optimization – they primarily simplify the settlement of services provided to taxpayers. Since the beginning of 2025, taxpayers organizing virtual events broadcast online do not charge VAT, as this tax will be settled by the purchaser using the reverse charge mechanism. However, if non-taxpayers take part in such an event, it will be necessary to identify their place of registered office/permanent residence/usual place of residence and settle VAT in this country, with the possibility of using the OSS procedure.

The new regulations require entrepreneurs to analyze and adjust settlements in the context of admission services to events with virtual attendance, as well as services in the field of culture, sports, science and similar, if they concern activities broadcast or otherwise made available virtually. Changes in VAT regulations in force from 2025 are another step towards modernization, harmonization and simplification of the tax system.

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