VAT on Fees Charged by Show Organisers: A Complex Tax Framework

It is not always obvious which VAT rate applies to the ancillary fees charged on top of a ticket to a show. Should the same VAT rate be applied as for the ticket sales themselves, which may sometimes benefit from a reduced rate?

This article looks at VAT on the fees charged by a show organiser on its own sales (with no intermediaries), and more specifically on booking fees (frais de location) and distribution fees (frais de distribution).

Booking fees and distribution fees: what are we talking about?

Booking fees are often passed on to ticket buyers to cover certain costs. In practice, the costs re-invoiced include, for example:

• the technical costs of operating and maintaining a website platform;
• the costs of the secure payment area (bank charges);
• the costs of the secure data-entry area;
• the costs of managing the interface with access control.

Distribution fees are also often passed on to buyers of show tickets. This re-invoicing covers the costs directly linked to distributing the tickets.

The general rule: the standard 20% rate

In principle, booking fees and distribution fees are taxable at the standard VAT rate of 20%.

However, three scenarios may lead to different conclusions.

Scenario 1: fees directly and exclusively linked to the tickets sold, on the same invoice

The booking and distribution fees are directly and exclusively linked to the seats or admissions sold. In addition, the admission fee and the booking and distribution fees appear on the same sales invoice.

In this scenario, the booking and distribution fees can benefit from the same VAT rate as the corresponding ticket. Under the legal principle accessorium sequitur principale (the accessory follows the principal), applying the same VAT rate is possible because the right of admission is the principal element and the booking and distribution fees are ancillary elements.

The Court of Justice of the European Union confirmed that the same VAT rate may be applied to ancillary fees in its judgment of 18 January 2018 in case C-463/16, known as Stadion Amsterdam (in French).

Scenario 2: fees linked to an order covering several products or services

The booking and distribution fees are instead linked to an order comprising a set of products or services, including the right of admission to the show, which are subject to different VAT rates.

In this scenario, it may be more prudent to apply the 20% VAT rate to the booking and distribution fees. However, if it is possible to determine the share of the booking and distribution fees that is exclusively linked to the seats or admissions sold, that share can benefit from the same VAT rate as the corresponding ticket.

The apportionment rule is as follows (our translation):

“In accordance with Article 268 bis of the French General Tax Code (CGI), where transactions liable to different rates are invoiced together for a single lump-sum price, the taxable person must apportion the revenue attributable to each rate in a simple and economically realistic way, under their own responsibility and subject to the tax authority’s right of audit. Failing such an apportionment, the whole price must be taxed at the highest rate.”

Scenario 3: separate invoicing

The right of admission to the show and the booking and distribution fees are invoiced separately.

In this scenario, the 20% VAT rate should be applied.

Setting up VAT correctly in your ticketing software

As this shows, the tax framework governing live-performance ticketing is complex. When tickets are put on sale, the VAT rates must be set up carefully in the ticketing software. Doing so requires a methodical approach in order to apply the right rate.

References

The sources below are in French.

• BOFiP — BOI-TVA-LIQ-30-20-40
• BOFiP — BOI-TVA-LIQ-30-30
• CJEU — judgment of 18 January 2018, Stadion Amsterdam (C-463/16)
• Mapado — French VAT rates for events
• CNM — VAT and live performance
• Billetterie Comédie de Tours — General terms of sale

For help setting up your VAT rates or reviewing your organisation’s situation, get in touch with FKO Expertise et Conseils.