VAT treatment of an event organization and TOMS
Binding tax ruling V1927-16 issued by the Spanish General Tax Directorate on April 4th, 2016.
The consultant entity is aimed to the organization of corporate events for companies. For the development of this activity, this entity acquires most of these goods and services from third parties. Its customers use to be the company promoter of the event, or travel agencies that subcontract these services with the consultant entity. In both cases, the customers would be established in other EU Member States.
Then, we will detail the VAT treatment on the different services provided by the consultant, if TOMS is applicable to or, conversely, services are considered as a unique service of business event organisation.
– Provision of services number 1:
Complete organisation of a business event that includes booking hotel, booking of meeting rooms with personal and media, catering and restaurant while the event takes place, various activities, which include: gala dinner, activities to develop the combination of workers with the company and each other, as well as transfers and transport necessary.
The services provided by the consultant will be considered as a unique service organization of a business event that is not subject to Spanish VAT due to the fact that the recipient has the consideration of entrepreneur or professional not established in the Spanish VAT but in other EU Member State, according to the general rule for B2B services contained in article 69.One.1st of the Spanish VAT Law.
– Provision of services number 2:
So-called same as above, but the client of the consultant is responsible for the accommodation, being the consultant in charge of the booking and organization of the other elements of the event.
The service rendered by the consultant shall be considered as a unique service of organization of a business event, with the same treatment that in the so-called earlier.
However, the VAT treatment of the hosting service provided by the customer (travel agency), will be considered independently, according to the VAT rules applicable.
– Provision of services number 3:
Similar service as the number 1 except that in this case, does not include recreational activities for attendees, such as guided visits.
The service provided by the consultant will be treated similarly than in the so-called no. 1.
– Provision of services number 4:
Organisation of an incentive event for executives and qualified personnel. The consultant is responsible for organizing full staff stay in the Spanish VAT territory, which includes travel, accommodation, catering, transfers, to which we must add activities such as shows, guided tours and cultural events (cooking classes, dance, etc.).
It is clear that this event would not have a business purpose but entertainment.
The service that would render the consultant to its client will be subject to TOMS, and will be considered as sole services that will be subject to Spanish VAT under the premise that the consultant entity is established in the Spanish VAT territory.
– Provision of services number 5:
In this case the consultant is responsible for the preparation of the trip, but not of the Organization of the event that causes the displacement and transport to Spain, which is organized directly by the client company.
In this case, it is also understood that the consultant provides a travel service consisting of accommodation and travel from the airport to the hotel and from the hotel to the event, as well as catering services.
The service that would render the consultant entity to the client entity would be subject to TOMS, and will be considered as a sole provision of services that will be subject to Spanish VAT under the premises that the consultant is established in the Spanish VAT territory.