Paris, July 1, 2020
The Finance Act 2020 amended Article 279 of the General Tax Code, extending the application of the reduced VAT rate of 10% to admission fees for exhibitions, sites and facilities of a cultural, recreational, educational or professional nature. The French Tax Legislation Directorate (DLF) has just confirmed that this new wording includes registration fees invoiced by an organizer to a participant. This is excellent news not only for organizers, but more generally for the attractiveness of France and its events.
What impact will this change have on your event?
When does this change apply?
It is applicable now since it depends on the 2020 Finance Act, which is already applicable. Publication in the Bulletin officiel des finances publiques is scheduled for September 2020. The exact date is not yet known. So you can either apply it now based on article 279 of the CGI of the 2020 finance law, or wait for the BOFIP publication scheduled for September.
What does this mean for you?
This change implies a modification of your invoicing for new registrations. For events where the registration site is already open, registrations prior to the rate change are subject to 20% VAT, registrations after the rate change will be subject to 10% VAT.
These changes should also be taken into account for credit note requests and cancellations. Credit notes issued must take into account the VAT percentage applied to the initial invoice.
If you're a Colloquium customer, don't worry, we'll take care of everything!
Who will benefit from this differential?
In concrete terms, you have 2 options:
- Let your participants benefit from this measure and lower your registration fees accordingly. This could be a way of boosting registrations after the COVID period.
Before: registration = €120 inc. VAT, i.e. €100 excl. VAT + €20 VAT
After: registration = €110 inc. VAT, i.e. €100 excl. VAT + €10 VAT
So a €10 reduction for participants, but painless for you. - Keep the difference to increase your registration revenues. This can be a way of securing your association's income by indirectly increasing the rates for your event, especially if you haven't done so for a long time.
Before: registration = 120€TTC or 100€HT + 20€ VAT
After: registration = 120€TTC or 109€HT + 11€ VAT
An increase of 9€ for you, but painless for your participants.
For group or individual registrations, 2 points of view to consider
Whatever your decision, bear in mind that most of the individuals who register for your event don't reclaim VAT. They therefore refer to the price including VAT. But groups, or more precisely companies registering groups, do recover VAT, and will therefore tend to refer to the price exclusive of VAT in the commercial relationship you have with them.
A "mixed" solution could therefore be to maintain the group rate before tax and increase it for individuals, for whom the change will be painless.
Read also: What VAT should you charge for your virtual or hybrid events?
