VAT treatment of mediation in the sale of entertainment tickets
Binding tax ruling V5427-16, issued by the Spanish General Tax Directorate on December 22 2016.
The issue that concerns us is the case of a company (company X) dedicated to the sale of tickets to shows, which are purchased directly from the organizer, other entrepreneurs aimed to selling tickets or individuals who cannot attend the show for which you acquired them. The amount to be charged for the sale of tickets can be the same price mentioned in the tickets, a commission over this price would be calculated in favour of the society X, or a price agreed between the parties. Sometimes the company X receives advanced payments by tickets that still have not put on sale.
Both society X, as the organizers of shows and the entrepreneurs or professional dedicated to the sale of tickets, shall be considered as entrepreneur or professional since, for consideration, order a set of media personal and materials, with independence and under their responsibility, for develop a business activity, through the continued realization of supplies of goods or rendering of services assuming the risk that can occur in the development of the activity.
However, private individuals who occasionally sell tickets by not be able to attend the show for which the acquired, they will not have the status of entrepreneurs since not ordering a set of personal and material resources with independence and responsibility to develop a business or professional activity by conducting continued supplies of goods or services.
The company X, for a commission, provides an intermediary service in the sale of tickets which may be carried out in its own name or on behalf of other company.
However as mentioned in the previous paragraph, should clarify that if the company X acts on its own name in the sale of tickets, i.e. acquires the tickets to another entrepreneur or professional to sell them at a later time, there will be two independent services: the seller would render a service of access to the event received by company X, and company X would render the same service to the acquirer of the ticket.
Shall be deemed that the company X provides an intermediary service when it acts on behalf of another entrepreneur or professional in exchange for a commission. In addition to this intermediary service there is a rendering of an access service to a show that would be provided by the seller of the entrance to the acquirer, not intervening the intermediary agent in this service.
The transmission of the entrance by a private individual to the company X, since this private individual does not act as an entrepreneur or professional, this transaction shall not be subject to Spanish VAT. However, the subsequent commercialization of the ticket carried out by the company X will be subject to Spanish VAT.
The service of access to the show, provided by a company or by a professional, will be subject to Spanish VAT when the show takes place effectively in the Spanish VAT territory. If the show takes place outside this territory, this transaction would not be subject to the Spanish VAT.
Regarding to the location of the intermediary service, when the recipient of the same is a company or a professional, the general rule for B2B services would apply, locating the same at the premises of the recipient.
On the contrary, if the recipient of the mediation service is a private individual, the service shall be subject to Spanish VAT when the main operation is located within the Spanish VAT territory. Then, the intermediary service shall be subject to Spanish VAT when the show to which it relates is held at this territory.
In relation to the VAT accrual on the provision of an access service or intermediary service, it occurs when this transaction is carried out, unless an advance payment prior to that date, in which case the tax is accrued at the time of said payment occurred. The accrual of the tax involves the obligation, for businessmen or professionals, of issuing the corresponding invoices and charging the VAT quotas.