Differentiation between educational services and services in respect to admission to educational event – announced issuance of guidelines by „VAT Committee“

3.2020.

VAT differentiation between educational services and services in respect to admission to educational event was one of the open issues for many years. This issue is important because in some cases it can lead to different VAT consequences. For example, if an education or educational event takes place in Croatia, and the service recipient is taxable person established in another country, the Croatian VAT shall not be due if the service is categorised as educational service, while the Croatian VAT shall be due if the service is categorised as admission to educational event.

In the past some countries adopted different solutions to this problem (e.g internal guidelines) while in some countries, like Croatia, this was just one additional „grey area“ resulting in a potential for different interpretations and tax disputes in practice.

Finally, in 2019 ECJ brough one judgement ( C-647/17 Srf konsulterna) which gives important guidance for the correct interpretation of this issue which is not adequately defined by EU VAT regulations. We provided some comments related to the ECJ guidance in this respect (available in Croatian language - PDF 0.3MB). However, while this ECJ judgement is important in dealing with this issue, it did now resolve all relevant aspects concerning this issue. As announced by VAT Committee in March 2020, VAT Committee has recognised some unclear aspects as sufficiently important and relevant so it has concluded that it would issue additional guidelines in this respect. Therefore, it is advisable to monitor further development in this respect.