Theatrical & Musical Events

1. Definitions
2. Legislation - relevant sections of the VAT Act
3. Summary
4. Events which come within the scope of the exemption from VAT
5. Events which are liable to VAT at the reduced rate
6. Events which are liable to VAT at the standard rate
7. Traders operating within a venue
8. VAT rates for ticket sales and other supplies associated with an event
9. Treatment of non-established performers and traders
10. What VAT obligations have non-established traders?
11. Non-established traders - What liability has the provider of the premises?
12. Non-established performers - who accounts for VAT on performances?
13. The withdrawal of the “50% (50/50) rule” for non-established performers with effect from 1st January 2007
14. Treatment of performers who promote their own performances
15. Sales of tickets by ticket agents and distributors
16. The treatment of advance ticket sales
17. Royalties, licence fees etc. paid by promoters or performers
18. Further Information
19. Appendix I. New concession regarding the supply of certain kinds of food and drink
20. Appendix II. The “Theatres’ Concession” – food or drink supplied in a separate room

1. Definitions

1.1 In this Information Leaflet, certain terms have specific meanings assigned to them, as follows:

• ‘Admission’: The allowing of an audience into an event. Admission includes the selling of tickets and the taking of money at the entrance, so that the person who sells a ticket for an event is deemed to be providing admission, and is treated for VAT accordingly.
• ‘Food and drink’: This includes all types of food, hot or cold, and all drinks, including water, and soft drinks. By concession, Revenue is prepared to extend the exemption from VAT to include events where certain types of food and drink are available (see Appendix 1).
• ‘Live theatrical or musical event (event)’: A play, musical, concert, recital, dramatic presentation, dance presentation, cabaret, comedy act or similar event performed before a live audience.
• ‘Performance’: The time when the performers are actually on stage or otherwise providing the entertainment for the audience.
• ‘Performer(s)’: The actors, musicians, dancers and comedians etc. who entertain the audience. Also includes a group, such as a theatre company, which has the actual performers as employees.
• ‘Premises-provider’: A person who owns, occupies or controls the venue (including land in the case of an open-air outdoor event) in which an event is to take place.
• ‘Promotion’: The financing or organizing of an event, including publicizing and other ventures to increase sales or public awareness.
• ‘Self-promoting performer’: A performer who finances, organizes and publicizes the performance and/or event.
• ‘Ticket agent/ticket seller’: A person engaged by the promoter to distribute and sell tickets for an event, normally reimbursed by way of a charge to the customer included in the ticket price and/or by commission charged to the promoter.

2. Legislation - relevant sections of the VAT Act

2.1 The law provides for an exemption from VAT for the following:

‘promotion of and admissions to live theatrical or musical performances, including circuses, but not including

1. dances, or
2. performances in conjunction with which facilities are available for the consumption of food or drink during all or part of the performance by persons attending the performance’.

[Paragraph (viii) of the First Schedule to the VAT Act 1972 (as amended)]

2.2 The law further provides that the following are liable to VAT at the reduced rate:

‘promotion of and admissions to live theatrical or musical performances, excluding

1. dances, and
2. performances specified in paragraph (viii) of the First Schedule;’

2.3 [Paragraph (vi) of the Sixth Schedule to the VAT Act 1972 (as amended)].

The promotion of and admissions to dances are liable at the standard rate. Where a dance is held on licensed premises, the law also specifies who is responsible for accounting for VAT:

‘The licensee of any premises (being premises in respect of which a licence for the sale of intoxicating liquor either on or off those premises was granted) shall be deemed to be the promoter of any dance held, during the subsistence of that licence, on those premises and shall be deemed to have received the total money, excluding tax, paid by those admitted to the dance together with any other consideration received or receivable in connection with the dance’

[Section 8 (3C)(a) of the VAT Act 1972 (as amended)]

3. Summary

3.1 Background

The exemption from VAT for live theatrical and musical events was introduced in 1985. In the intervening two decades a certain amount of confusion has arisen concerning the type of events to which it applies. Following a number of requests for clarification it was decided to issue this leaflet to restate the law and provide guidance regarding its application.

This Information Leaflet sets out the VAT treatment of the different services involved in the staging of live theatrical and musical events. These services include promoting the event, distributing and selling tickets, providing security and catering, the sale of concessions within the venue, the sale of goods within the venue, the performing of the artists, and the granting of admission. Each of these subjects is dealt with in detail in the main body of the leaflet and a brief synopsis of their treatment for VAT is set out below.

3.2 Ticket prices, promoter’s fees and ticket agent’s commission

The law provides that promoter’s fees and admission charges for a live event are liable to VAT the reduced rate if food or drink is available at the event (Paragraph 5 - Events which are liable to VAT at the reduced rate). If no food or drink is available, then promoter’s fees and admission charges are exempt from VAT (Paragraph 4 - Events which come within the scope of the exemption from VAT). Non-resident promoters are obliged to register for and charge VAT in Ireland (Paragraph 9 - Treatment of non-established performers and traders). Commission fees, credit card handling charges and any other charges made by ticket selling agents form part of the price of the ticket, and are liable to VAT at the same rate (Paragraph 15 - Sales of tickets by ticket agents and distributors).

In conjunction with the law, a concession currently operates (Appendix II – The Theatres’ Concession) in respect of venues where food or drink is provided, and must be consumed, in a part of the venue completely separate from the performance. In addition, as a result of the consultation process undertaken for this leaflet, a new concessionary treatment is being offered by Revenue in respect of the supply of certain types of food and drink at events (See Appendix I for full details). In effect, the supply of crisps, sweets, soft drinks and water will not make an otherwise exempt event liable to VAT. Only the supply of substantial snacks, hot food or alcoholic drink will be considered when deciding if an event is exempt or liable to VAT.

3.3 Performer’s fees

Any fee charged by a performer is subject to VAT at the standard rate. A performer who is registered for VAT will issue a VAT invoice for the amount of his/her fee and charge VAT at the standard rate on the full amount of that fee. A non-resident performer will normally not be required to register for VAT in Ireland. In the case of performances by non-resident performers, the person who hired the performer, normally the promoter, will account for the VAT (Paragraph 9 - Treatment of non-established performers and traders). If the actual performers are employees of a production company, then the amount received by that company is regarded as the performance fee, rather than the salary paid to the performers. Where a performer promotes his/her own performance, then the fee paid may be split as between the promotion activities and the performance (Paragraph 13 -The withdrawal of the ‘50% (50/50) rule’ for non-established performers with effect from 1st January 2007).

3.4 Security, catering and similar services

These services are all liable to VAT at the appropriate rates (Paragraph 7 - Traders operating within a venue). If a company supplying these services is not established in Ireland it must register and account for VAT.

3.5 Traders selling goods or services within a venue

Goods and services sold in the course of an event are liable to VAT in the usual way. Non-resident traders are obliged to register for VAT prior to trading. Concessions that permit traders to sell goods or services within a venue are liable to VAT at the standard rate on the full amount received in respect of the granting of the concession (Paragraph 8 - VAT rates for ticket sales and other supplies associated with an event).

4. Events which come within the scope of the exemption from VAT

4.1 The exemption from VAT covers promotion charges and admission fees for all live events at venues where there are no facilities available for consumption of substantial snacks, hot food or alcoholic drink (Appendix 1 - New concession regarding the supply of certain kinds of food and drink) during all or part of the performance by persons attending. Promotion of and admission to any live theatrical or musical event will be exempt where:

• No substantial snacks, hot food or alcoholic drink are supplied to persons attending the event during any part of the performance.
• No substantial snacks, hot food or alcoholic drink are available for purchase during any part of the event at the venue in which the performance is taking place.
• No substantial snacks, hot food or alcoholic drink can be taken by persons attending the event or on their behalf into the venue where the performance is taking place.

4.2 Events to which the exemption applies generally include outdoor concerts and performances, and plays, concerts and similar events in theatres and concert halls, and any other halls or similar establishments where substantial snacks, hot food or alcoholic drink are not permitted to be consumed during all or part of the performance

The diagram below shows the VAT treatment of the supplies that go to make up an exempt event.

If no substantial snacks, hot food or alcoholic drink are available at the event, then the ticket sales are exempt from VAT. This means that the promoter is not able to recover VAT charged by performers, security etc. in connection with the event.

5. Events which are liable to VAT at the reduced rate

5.1 The exemption does not cover promotion of or admission to events where facilities are available for the consumption of substantial snacks, hot food or alcoholic drink during all or part of the performance by persons attending the performance. This exclusion from exemption also applies where a separate charge is made for the food and drink.

5.2 The reduced rate of VAT applies to events where there are facilities for the consumption* of substantial snacks, hot food or alcoholic drink during the performance by persons attending the performance. VAT at this rate must be accounted for on money received for tickets, and any fee charged by the promoter in relation to these events. However, this VAT may be offset by the right of the promoter and the ticket agent to recover any VAT charged to them in connection with the staging of the event, such as VAT on the performer’s fee, security, hire of equipment etc.

* The expression ‘facilities for the consumption of food or drink’ does not imply a formal sit-down venue. If people attending an event can obtain food or drink and consume it, then it must be accepted that facilities are available to do so.

Accordingly, VAT is chargeable at the reduced rate on promotion and admission charges in respect of any live theatrical or musical event under Paragraph (vi) of the Sixth Schedule to the VAT Act 1972 (as amended) where:

• Substantial snacks, hot food or alcoholic drink are provided to persons attending the event in the room/venue in which the performance takes place as part of the admission fee.
• Substantial snacks, hot food or alcoholic drink are available for purchase by persons attending the event in the room/venue in which the performance is taking place.
• Substantial snacks, hot food or alcoholic drink are available for purchase at any part of the venue which can subsequently be taken by persons attending the event or on their behalf into the room/venue where the performance is taking place.

5.3 Events to which the reduced rate applies generally include:

• Cabaret and other performances where the consumption of substantial snacks, hot food or alcoholic drink are associated with the performance.
• Musical or comedy performances in theatres, public houses and other venues where substantial snacks, hot food or alcoholic drink are served during the course of the performance.
• Performances in hotels, restaurants or other establishments where substantial snacks, hot food or alcoholic drink are supplied in conjunction with the performance.
• Outdoor concerts where substantial snacks, hot food or alcoholic drink are available within the confines of the venue.

5.4 The diagram below illustrates the VAT treatment of the supplies that go to make up a taxable event.

If substantial snacks, hot food or alcoholic drink are available at the event, then the ticket sales are liable to VAT at the reduced rate. This allows the promoter to recover VAT charged by performers, security etc. in connection with the event. Since much of the VAT charged to the promoter is at the standard rate, the promoter may actually be in a net VAT repayment position - i.e. the VAT charged to the promoter in respect of costs may exceed the VAT due on ticket sales.

6. Events which are liable to VAT at the standard rate

6.1 Neither the exemption nor the reduced rate applies to the promotion of or admission to venues where the entertainment, if any, is not a live theatrical or musical performance. The standard rate of VAT applies to charges made in respect of the promotion of or admission to these venues.

6.2 Venues and events to which the standard rate applies generally include:

• Dances,
• Discotheques,
• Night-clubs and similar clubs,
• Public houses and any other such premises where there is no live musical or theatrical performance.

NB: The standard rate of VAT applies to dances, whether or not there is a live band. In these cases, it will be clear that people are attending the dance, rather than the performance by the band.

7. Traders operating within a venue

7.1 Where a concession, licence or right is granted to any person to sell food, drink or any merchandise, or to supply any services, in a venue, any consideration paid in respect of such a concession, licence or right is liable to VAT at the standard rate. Any traders operating such a concession, licence or right must register and account for VAT in the usual way in respect of sales made by them. However, the sale of programmes containing only details of the performance is regarded as ancillary to the performance, and liable to VAT at the same rate as the admission fee.

7.2 All traders are also responsible for ensuring that they possess all relevant permits and licences required by law or regulations. In particular, any trader selling alcoholic drinks at an event must possess a licence in his/her own name issued under the Intoxicating Liquor Licensing Acts which allows the sale of alcoholic drinks at the venue and for that event. It is illegal for a trader at an event to sell intoxicating liquor under a licence granted to any other person, including the promoter of the event.

8. VAT rates for ticket sales and other supplies associated with an event

8.1 Irish VAT law allows different rates of VAT to apply to the sale of tickets for different kinds of events. There are also different rates which apply to other services associated with events, and these rates are set out in the table below.

8.2 As can be seen, the VAT rate that applies to the admission fees for live theatrical or musical events also extends to other fees and charges connected with the issuing of tickets and promotion of the events. These include:

• The booking fees or handling fees charged for issuing a ticket;
• The commissions charged by ticket agents;
• The fees charged by promoters to performers who have hired them to organise events;
• The fees charged by promoters to venue owners for sourcing performers.

9. Treatment of non-established performers and traders

The provisions which refer to the supply of services by non-established performers are included below.

9.1 Relevant sections of the VAT Act

The law provides that

‘where a person not established in the State supplies a cultural, artistic, entertainment or similar service in the State, then any person, other than a person acting in a private capacity, who receives that service shall

• in relation to it, be an accountable person or be deemed to be an accountable person, and
• be liable to pay the tax chargeable as if that accountable person had in fact supplied the service for consideration in the course or furtherance of business;

but where that service is commissioned or procured by a promoter, agent or other person not being a person acting in a private capacity, then that promoter, agent or person shall be deemed to be the person who receives the service;’

9.2 [Section 8(2)(aa) of the VAT Act 1972 (as amended)]

In addition Section 8(2)(d) of the VAT Act 1972 (as amended) provides that a ‘premises provider’ (being a person who owns, occupies or controls land) who allows non-established traders or promoters to operate on the land, has certain obligations with regard to the VAT liability of these non-established traders or promoters.

9.3 In the case of non-established traders supplying goods for a period of less than 7 consecutive days on the land, the premises provider must, not later than 14 days before the day on which the non-established trader is allowed to trade on the land, notify the local Revenue District of the name and address of the trader, the dates on which the trader intends to supply goods, and the address of the land.

9.4 In the case of non-established promoters supplying a cultural, artistic, entertainment, or similar service, the premises provider must, not later than 14 days before the day on which the service is scheduled to begin, notify the local Revenue District of the name and address of the promoter, and the dates, duration and venue of the event or performance.

9.5 Where a premises provider fails to provide true and correct information as required, then he/she may be made jointly and severally liable with the non-established trader or promoter for the VAT due in respect of the supplies made by them.

10. What VAT obligations have non-established traders?

10.1 Where non-established performers or any other non-established traders make sales of merchandise such as CDs, posters, t-shirts etc at a venue in the State, they are obliged to register and account for VAT on all such sales and all other supplies made by them.

11. Non-established traders - What liability has the provider of the premises?

11.1 Where a person who owns, occupies or controls premises (whether the owner or a third party) allows a non-established trader to supply goods for a period of less than seven consecutive days on the premises in which a performance is to be held, the provider of the premises must give the following information to Revenue:

• The name and address of the non-established trader.
• The dates on which the non-established trader intends to trade on the premises
• The address of the premises

The provider of the premises must give this information to the officer in the Revenue District responsible for his/her tax affairs not later than 14 days before the performance is scheduled to begin.

11.2 Where this information is not given to Revenue as set out above, the provider of the premises may be made jointly and severally liable with the non-established trader for the VAT liability in respect of the supplies of goods in the premises concerned. In practice, this means that if the non-established trader fails to register and account for any VAT due in respect of sales made in the State, the provider of the premises, whether the owner or a third party or both jointly, will become liable for the entire amount of VAT due.

12. Non-established performers - who accounts for VAT on performances?

12.1 A non-established performer is an individual who is not normally resident in the State or who does not have a business establishment here. It also may be a performance company which does not have a business establishment here. Section 8(2)(aa) of the VAT Act as set out in paragraph 9.1 - Relevant sections of the VAT Act above provides that a non-established performer is not obliged to register and account for VAT in respect of live theatrical or musical performances in the State. Instead, the promoter, agent or other person (including non-established promoters etc – Paragraph 12.2 ) who commissions the performance or event is automatically obliged to account for the VAT due. This applies even where the turnover from the performance does not exceed registration thresholds.

12.2 What VAT obligations have non-established promoters?

Non-established promoters supplying services in Ireland must register and account for VAT on taxable supplies made by them, and also in respect of any payments made by them to non-established performers *. In practice this means that registration is required in all circumstances, except only where the non-established promoter is promoting only a performance by a performer registered for VAT in Ireland, and this performance features in an event which comes under the exemption from VAT.

*This applies even where the payments are the subject of a separate contract covering a number of performances in different countries, or where the performer issues an invoice from an establishment outside the State in respect of the performance. If the place of supply of the performance is Ireland, then the VAT liability for payments to the performer arises in Ireland.

12.3 Non-established promoters – what liability has the provider of premises?

Where a non-established promoter arranges for the supply of live musical or theatrical entertainment, the person who owns, occupies or controls the premises in which the performance is to take place has certain obligations to Revenue.

The provider of the premises must give the following information to Revenue:

• The name and address of the non-established promoter.
• Details such as the dates, duration and venue of the performance.

12.4 The provider of the premises must give this information to the officer in the Revenue District responsible for his/her tax affairs not later than 14 days before the performance is scheduled to begin.

12.5 Where this information is not given to Revenue as set out above, the provider of the premises may be made jointly and severally liable with the non-established promoter for the VAT liability in respect of the performance. In practice, this means that if the non-established promoter fails to register and account for any VAT due, the provider of the premises, whether the owner or a third party or both jointly, will become liable for the entire amount of VAT due.

13. The withdrawal of the “50% (50/50) rule” for non-established performers with effect from 1st January 2007

13.1 The ‘50% rule’ was an administrative procedure whereby Revenue, on a concessional basis, allowed promoters/performers/venue owners (as appropriate) to account for VAT on performances by non-established performers as follows:

‘50% of the gross income @ the standard rate was treated as being the amount of tax payable by the performer on his/her performance at the event. There were no input credits available against this amount. There were no further reductions available.’

Following the change to Section 8 (2) (aa) of VAT Act 1972 (as amended) this concession no longer applies.

14. Treatment of performers who promote their own performances

14.1 Where a performer promotes, either by him/herself or with others, an event in which he/she is performing, any payment received must be apportioned as between the performance and the promotion. Any such apportionment will depend on the individual circumstances, and the performer must demonstrate to the satisfaction of Revenue that the apportionment is a correct one. Where the actual performers are employees of the promoter or another company, the promoter or other company is liable for VAT on the performance.

14.2 If a performer can show evidence of real work carried out in the promotion of the event, Revenue is prepared to accept that a portion of the payment received by a self-promoting performer may be treated as being in respect of the promotion, up to a maximum of 40 per cent of the total, which is either exempt or liable to VAT according to the nature of the event. The remainder, at least 60 per cent, is treated as being in respect of the performance, and liable to VAT at the standard rate.

15. Sales of tickets by ticket agents and distributors

15.1 A promoter of an event may use a ticket agent to sell tickets for events. Promoters and ticket agents may also use a network of distributors, such as local music stores, to ensure a broad distribution of tickets. The actual sale of a ticket by a promoter, a ticket agent or distributor is the supply to the customer of the right to admission to an event.

15.2 Accordingly, for an event that does not come within the scope of the exemption, the agent or distributor who sells a ticket is liable to account for VAT on the full sale price (the face value of the ticket and all booking charges and fees whatsoever, including any commission charged to the promoter) at the rate appropriate to the event.

15.3 The agent or distributor should issue a VAT invoice for the commission on the sale. The person to whom the agent or distributor forwards the balance of the ticket price (e.g. another agent or the promoter) must issue a VAT invoice on receipt of the money, and account for VAT on the amount received.

The diagram below illustrates the VAT treatment of the sale of tickets for a taxable event by ticket agents and distributors.

16. The treatment of advance ticket sales

16.1 Where payments are liable to VAT (see Paragraph 8.1) payments received in advance of the supply of goods or services are always liable to VAT at the time the payment is made. This also applies to sales of tickets for live theatrical and musical events, where these are sold prior to the date on which the event takes place.

16.2 With effect from 1st January 2007, ticket sales in advance are liable to VAT by reference to the date on which the ticket is sold and VAT must be accounted for in the taxable period in which the sale is made, and not when the event takes place. Where the event is liable to VAT the rate of VAT that applies is always the rate current at the time of sale of the ticket.

16.3 If an event is cancelled, and the promoter, ticket-agent or distributor refunds the full amount of the ticket, including VAT, to the purchaser, a claim may be made in the next VAT return for a repayment of any VAT previously submitted.

It should be noted that advance payments by promoters to performers are also liable to VAT at the time of payment.

17. Royalties, licence fees etc. paid by promoters or performers

17.1 Certain performances consist of or contain material which is subject to copyright or similar intellectual property protection. Any fee charged by a person registered for VAT in Ireland in respect of the right to use this material is liable to VAT at standard rate.

17.2 Where the person who holds the copyright etc. is not established in the State, then payments made come within the scope of the Fourth Schedule to the VAT Act 1972 (as amended). This means that the promoter or performer who pays the fee must also account for the VAT on the fee as though he/she had supplied the right to use the material. If the event comes within the scope of the exemption, then this VAT may not be recovered.

18. Further Information

18.1 Enquiries regarding any issue contained in this Information Leaflet should be addressed to the Revenue District responsible for the taxpayer’s affairs. Contact details for all Revenue Districts can be found on the Contact Details Page.

This leaflet is issued by:

VAT Interpretation Branch ,

Indirect Taxes Division,

Stamping Building

Dublin Castle.

January 2010

Appendix I. New concession regarding the supply of certain kinds of food and drink

Previously, where food and/or drink were available at any event, the promotion and admission fees were in all cases liable to VAT. However, in recognition of certain practical difficulties, and to ensure consistency of treatment, Revenue is prepared to concessionally disregard the supply of certain items of food and drink when considering the VAT treatment of events.

Revenue will allow the exemption to continue to apply to events where certain cold snack foods, confectionary and soft drinks can be consumed during the performance. This means that promotion charges and the sales of tickets for these events will not now be subject to VAT, whereas previously the availability of any food and drink would have denoted a VAT liability. The items of food and drink to which this concession refers are as follows:

Food

• Confectionary:
  • Packets of sweets
  • Bars (e.g. chocolate)
  • Chewing gum
  • Lollipops etc.
• Savoury snacks:
  • Crisps and similar snacks
  • Peanuts
  • Popcorn (incl. heated)
• Fruit

Drink

• Soft Drinks:
  • Carbonated (fizzy) drinks
  • Fruit juices
  • Milk
  • ‘Smoothies’ and other milk or yoghurt based drinks
  • ‘Slushies’ and similar ice drinks.
• Water:
  • Still bottled water
  • Sparkling bottled water
• Hot drinks :
  • Tea
  • Coffee
  • Hot Chocolate

Sales of any other kind of food and drink including sandwiches, wraps, hot snacks, meals and alcoholic drink are not included in this concession. The sale of such items would have the effect of bringing the event within the scope of VAT.

Appendix II. The “Theatres’ Concession” – food or drink supplied in a separate room

Many theatres allow the supply of food and drink during an interval or intermission in a performance. Revenue concessionally allowed the exemption from VAT to continue to apply to these events on the following conditions:

• The food and drink was only available in a room separate from the auditorium in which the performance was taking place,
• The performance was not visible from the room where the food or drink is available,
• Patrons were not permitted to take the food or drink into the auditorium where the performance was taking place before, during or after the interval.

While this concession was originally only granted in respect of theatres, Revenue has extended it to include other types of performances in other venues. Accordingly, in the case of any event, where substantial snacks, hot food or alcoholic drink (See Appendix I above) are available to the audience at any stage during the performance, then the event remains within the exemption if it is the stated and enforced policy of the management that the following conditions are adhered to:

• Substantial snacks, hot food or alcoholic drink are only available in a separate part of the venue from that in which the performance takes place,
• The performance is not visible from the area where the substantial snacks, hot food or alcoholic drink are available,
• Patrons are not permitted to take substantial snacks, hot food or alcoholic drink into the part of the venue where the performance takes place at any time during the performance.

The availability of substantial snacks, hot food or alcoholic drink under any other circumstances would have the effect of bringing the event within the scope of VAT.