Hungary Implements EU-Wide VAT Rules for Virtual and Entertainment Events
Last year, the EU published the newly adopted Directive 2022/542, which focused on the palace of supply for virtual events. Under that Directive, starting on January 1, 2025, taxability rules for cultural, artistic, scientific, educational, entertainment, or similar activities changed, making the place where the consumer resides or has a permanent address (B2C) relevant.
At the beginning of 2025, the Hungarian National Tax and Customs Office released a notice explaining new taxability rules relating to the place of supply of services for entertainment and virtual events.
The Impact of New Taxability Rules
General VAT rules state that the place of supply for services providing access to cultural, artistic, scientific, educational, entertainment, sporting, or other similar events is where the event is being held.
However, these rules changed on January 1, 2025. When the consumer is a non-taxable person, the place of supply of these services is the consumer's permanent address or, when such an address is unavailable, the usual place of residence. In other words, B2C transactions are taxed according to the consumers' location.
For business-to-business, B2B, transactions relating to online organized events with a virtual presence, the place of supply is determined based on the general rules, meaning the place where the business receiving the services is established.
The Hungarian government amended articles 37, 42, and 43 of the national VAT Law to implement these new rules at the EU level and align with EU legislation.
Conclusion
Businesses and companies that sell tickets or are in any other way engaged in providing access to cultural, artistic, scientific, educational, entertainment, sporting, or similar events, such as exhibitions, fairs, presentations, and other ancillary services, should consider the implications of new rules for their business models.
Moreover, they should adapt their in-house policies and adjust their invoicing and accounting systems to meet new requirements.
Source: National Tax and Customs Office, VATabout
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