BMF introduces partial revision of rules governing online events

Background

Spurred on by the pandemic, events such as concerts, seminars and public talks are now frequently held online. Hybrid formats, in which a live event is broadcast online in real time, are also popular. Pre-produced recordings - available for participants to view at any time - are also on the rise. The question is how these new formats fit within existing rules on place of supply and VAT exemption.

Provisions of earlier BMF Circular - and criticism

In its Circular dated 29 April 2024, the BMF issued rules governing B2C services, making a distinction between pre-produced content and live streaming, and also covered service commissions. These rules remain unchanged in the new Circular dated 8 August 2025 and can be summarised as follows:

• Pre-produced content, available at a fixed or freely-chosen time: This refers to services provided electronically with place of supply at the place of residence, habitual abode or registered office of the recipient.
• Pre-produced content, transmitted simultaneously by radio or television: This constitutes a broadcasting/television service. There is no VAT exemption under § 4 No. 20 a of the German VAT Act (UStG), nor any reduction under § 12 (2) No. 14 UStG.
• Live streaming: This is not classed as an electronically-supplied service, but falls under cultural, artistic, scientific, educational, sporting, entertainment or similar services. According to § 3a (3) No. 3 a UStG, the place of supply is the place of residence, habitual abode or registered office of the participant. A VAT exemption under § 4 No. 20 a UStG applies if the supplies are provided by an eligible institution. The determining factor here is real-time interaction with an audience, which may also consist of mere listening activity. Straightforward recorded teaching sessions, with feedback either non-existent or automatically generated, such as with learning apps, are not VAT-exempt.
• Service commission: Service-related features of a VAT exemption or reduction also apply to supplies rendered by or for a contractor. Person-specific features must be assessed separately for each service. The procurement of a service which is VAT-exempt under § 4 No. 20 a UStG is also itself VAT-exempt.

The main criticism was directed at the previous rule governing combined services, where a recording is made available in addition to a live stream, accessible to the user at a time of their choice. The BMF's 2024 position was that this generally constituted a single supply subject to VAT at the standard rate. Only if a separate fee or surcharge were levied for the recording would this be deemed to constitute the provision of two distinct services to be assessed separately. The rationale behind this was that (only) in this case is the live stream was neither inseparably linked to the recording nor merely ancillary as a means of access under optimal conditions. In such cases, the remuneration levied would need to be divided into a VAT-exempt and taxable element (unless the  remuneration for the recording were already defined based on the surcharge).

New rules

In its new Circular, the BMF drops this determination and states only that the question of whether single or multiple supplies exist must be assessed in accordance with general principles. On the one hand, this is correct, particularly since, according to ECJ case law, the single or composite nature of a charge levied is specifically not decicive as regards the question if there is a single or a complex supply. On the other hand, it removes legal certainty for those event organisers who made separate charges for recordings in response to the previous BMF Circular. The same applies to those who intentionally opted not to apply a surcharge so as to render their supply 100% taxable and thus benefit from full input VAT deduction. These organisers must now reassess their events. Overall, the level of uncertainty has increased.

Rules of application

The BMF Circular dated 29 April 2024 is now withdrawn. The new Circular applies to VAT exemptions and VAT reductions in all open cases and, with regard to place of supply, to transactions undertaken after 31 December 2024. However, there is a "non-objection" rule for transactions prior to 1 January 2026 whereby, during this period, businesses may continue to rely on the previous BMF Circular with regard to both output supplies and input VAT deduction.

Author: Nadia Schulte