VAT changes to the place of supply for virtual events

On 6 June 2025, the Council of Ministers approved the amendment of Schedule 13 of the VAT Law regarding certain special rules on the place of supply of services. More precisely, conforming to the provisions of ΚΔΠ 159/2025, which was published in the Official Gazette of the Republic with effect from 1 January 2025, Schedule 13 of the VAT Law has been revised as follows:

A. Amendment to Paragraph 4 – Admission to Events (B2B)
Amendment:
Immediately after the end of paragraph 4, the following phrase is added:
“This paragraph shall not apply to admission to events where participation is virtual.”

According to the special rule on the place of supply of services under paragraph 4 of Schedule 13 of the CY VAT Law, the place of supply of services relating to admission to cultural, artistic, sporting, educational, entertainment, or similar events provided to a taxable person was deemed to be the place where the events actually took place.
Effective from 1 January 2025, virtual (online) participation will no longer be considered "admission" for the purposes of this special rule. Instead, the place of supply of such services to a business (B2B) is determined under the general place of supply rule (Article 10A of the VAT Law), i.e., the location of the recipient.

This means that:

1. For B2B customers established in non-EU (third) countries, the supply is considered to fall outside the scope of Cyprus VAT, and therefore no VAT is charged.
2. For B2B customers in other EU Member States, no VAT is charged. The transaction must be included in the VIES recapitulative statement, and the invoice must clearly state "Reverse charge".
    

B. Amendment to Paragraph 15A – Admission to Events (B2C)
Amendment:
Immediately after the end of paragraph 15A(1), the following phrase is added:
“However, where the services and ancillary services relate to activities delivered via live streaming or made available virtually by other means, the place of supply shall be the location where the non-taxable person is established, has their permanent address, or usually resides.”

According to the special rule on the place of supply of services in paragraph 15A of Schedule 13 of the CY VAT Act, the place of supply for services relating to admission to cultural, artistic, sporting, educational, entertainment, or similar events provided to a non-taxable person (i.e. an individual) was deemed to be the place where the events physically took place.

From 1 January 2025, virtual (online/electronically delivered) participation will no longer qualify as “admission” under this special rule. The place of supply of such services to individual customers (B2C) will be the place where the recipient is established, has their permanent address, or usually resides.

This means that:

1. For B2C customers in non-EU (third) countries, no VAT is charged. The transaction falls outside the scope of Cyprus VAT.
2. For B2C customers in other EU Member States, VAT is charged at the rate applicable in the respective Member State. To avoid multiple VAT registrations across EU countries, suppliers may opt to register under the One Stop Shop (OSS) scheme — a voluntary regime that allows businesses to report and pay VAT due in multiple EU Member States through a single Member State.
    

Should you require further clarifications concerning the above, please contact our trusted advisors in the Indirect Tax Department at KPMG Cyprus.

KPMG’s Indirect Tax team provides advice and assistance at the Cyprus and international level. We structure our effort to dovetail with your business issues and strategy. Our focus is on supplying value adding and pragmatic advice rather than just a list of recommendations.

Our tax professionals are able to review your company’s current tax position and provide relevant advice and planning on a range of green initiatives, indirect taxes, including VAT, customs duties and excise taxes (such as tax audits, reorganizations and acquisitions, etc.). Furthermore, we can help your company with its administrative obligations and contacts with administrative bodies.