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Due to the corona crisis it is not allowed to organise an event in most European countries in the near future. As a result, you may have had to cancel an event. In addition to the huge financial loss, this can also have consequences for paying VAT on ticket sales and reclaiming VAT on costs incurred. These VAT consequences may differ per country.
When selling tickets for an event, the VAT should be paid in the country where the event takes place. In case of cancellation of the event the earlier paid VAT can usually be reclaimed. Among other things, this depends on whether and how your company will compensate the ticket buyers. If you pay back the full ticket price to the buyers, you are allowed to reclaim all VAT paid. If you repay part of the ticket price, the VAT refund depends on the general terms and conditions which are in force. If your company deducts a small compensation for the damages suffered because of cancellation of the event, you may generally reclaim the paid VAT. If you withhold more than the damages suffered by the company, there is a good chance that it is not allowed to recover the VAT on that exceeding part.
This also applies to cancellation costs. If the potential visitor has not yet paid the ticket price, but is charged with a cancellation fee, it depends on the general terms and conditions whether or not you have to pay VAT over that fee.
If you have already purchased goods and services in connection with the cancelled event and have reclaimed VAT on these costs, then you generally do not have to repay that VAT to the tax authorities. If you have paid advances on services and goods that will not be delivered due to the crisis, such as accommodation, rental equipment and catering, this is more difficult to determine. As with the sale of tickets, it has to be investigated whether the VAT already reclaimed must be paid to the tax authorities or not. This depends, among other things, on the conditions under which this happens.
The VAT implications can be significantly complex and vary by country. We therefore invite you to to assess the VAT consequences of cancelling your event(s). Especially during these extraordinary time, your is ready to support your company.