Cancelled events due to the coronavirus: what to do with VAT?

The coronavirus is spreading rapidly and many events are cancelled for safety reasons. This also affects VAT. We will use this article to provide you with our insights.

Reclaimable VAT

There is every chance the organiser of the cancelled events has already accounted for the VAT collected on the sale of the tickets to the tax authorities. There are several situations where there are arguments to take the position that the VAT already paid can possibly be claimed back from the tax authorities. This may be particularly beneficial if the organiser doesn’t have to refund the amount received to the initial ticket purchasers. 

VAT deduction exclusion decree (BUA)

In addition, it’s also quite possible that you, as an employer, have cancelled planned company events for safety reasons. In such cases you may have already incurred costs related to the planned event. The VAT incurred on these costs could initially be excluded from deduction as a result of the applicable BUA legislation. However, the cancellation of the event meant no staff benefits were actually enjoyed. We are therefore of the opinion that the BUA legislation should not be applicable and that the right to deduct the VAT on costs initially incurred for staff benefits should be reinstated.

Would you like to know more about the possibilities and consequences for your organisation? Please contact Baker Tilly VAT & Customs Advisory.

This content was published more than six months ago. Because legislation and regulation is constantly evolving, we recommend that you contact your Baker Tilly consultant to find out whether this information is still current and has consequences (or offers opportunities) for your situation. Your consultant will be happy to discuss the latest state of affairs with you.