ORGANIZING A CONGRESS OR CONFERENCE IN FRANCE

Managing VAT on congresses and conferences held in France

Organizing a professional event in France usually gives rise to expenses on which local VAT is charged. Fortunately, French VAT can be reclaimed by the foreign organizer provided that the latter complies with the tax obligations resulting from the event held in France.

This article is intended to guide foreign commercial and not-for-profit organizations on their VAT obligations when planning professional, medical or scientific meetings to be hosted in Paris, Lyon, Marseille or any other major city in France.

1. Registering the foreign legal entity for French VAT

Delegates from all over the world will attend your upcoming event in France and they will have to pay an admission fee. You will also have income from exhibition space rental and sponsorship arrangements with industry. In order to maintain a fair competition with local organizers, you will be required to register your foreign organization for VAT purposes in France. It should be noted that it is highly risky to plan to host an event in France and ignore this tax obligation.

You might be wondering: why should we register for French VAT when in our home country we are registered as an association or a not-for-profit organization not subject to corporate and sales tax? In fact, what really matters is not your legal status abroad, but the qualification of your activities in France as lucrative.

In some cases, the legal owner of the commercial rights on a congress held in France is a foreign scientific society, but the organization of the event is entrusted to a Professional Congress Organizer (PCO). Who should register for French VAT in such a case? The foreign scientific society or the PCO or both? Not understanding the tax liability of each party and making a mistake on which party must register for French VAT can result in a non-recoverable financial loss.

2. Issuing correct VAT invoices for services sold in France

Invoicing is probably one of the most challenging aspects of your next event in France and it will definitely require the assistance of a tax practitioner to secure your project. As a foreign organizer of a professional or scientific meeting in France, you will absolutely need to be able to answer the following questions accurately:

❖  Are the contracts with industry sponsors and exhibitors subject to French VAT?
❖  Do I need to include French VAT on all my invoices to participants?
❖  What is the correct VAT rate for delegate registration?
❖  For which specific transactions I should not charge French VAT?
❖  What evidence do I need to collect in order to justify the VAT exemption?
❖  How should I handle VAT on the social event (e.g. gala dinner)?
❖  Are the VAT rules different when my event is on-site, online or hybrid?
❖  How to handle a package including items and services subject to different VAT rates?

Raising correct invoices during your next event will not only reduce your tax risk in France, but it will also help your corporate delegates and exhibitors to easily reclaim French VAT paid on conference/congress passes and exhibition space.

3. Reclaiming VAT on business expenses incurred in France

A key benefit for a foreign organizer to register for VAT in France is the eligibility to reclaim French VAT charged on most expenses incurred for the organization of a professional event. The standard VAT rate in France being 20% and the reduced rate 10%, the amount of VAT incurred for a medium-sized event can be significant.

French VAT is typically charged on event expenses such as:

■  Rental of the event venue (meeting room, conference hall, convention center);
■  Catering services (snacking, coffee break, food and drinks);
■  Gifts for delegates (goodies, pens, bags, souvenirs);
■  Printing brochures and other materials;
■  Site cleaning services after the event;
■  Entertainment and hospitality expenses for delegates;
■  Accommodation and transportation for staff, delegates and speakers.

Some service providers may also charge by mistake French VAT on services that should not normally include VAT when it is a B2B transaction and the buyer (i.e. the organizer) is based abroad.

Most of these services are as follows:

◎  Venue decoration and signage;
◎  Rental of audiovisual equipment;
◎  Installation of exhibition desks and booths;
◎  Furniture rental (tables, chairs, shelves…);
◎  Telecommunication services (phone, internet);
◎  Hiring of staff (technicians, hostesses, interpreters).

Corintax® always ensures that these specific cases are identified and provides a legal reference for your service providers to amend their proforma invoices before any payment is made.

Generally speaking, you will have to pay the first deposit for booking the venue of your event in France approximately two (2) years before the actual date of the conference. If you are not yet registered for French VAT at the time of your payment, you may lose the right to reclaim VAT on this first payment, unless you agree in writing with the convention center or the hotel that this initial payment should be seen as a non-taxable security deposit to be refunded at the normal end of the contract.

Further help or advice?

Corintax® is a VAT fiscal representative specialized in cross-border transactions in Europe. We help foreign organizers and PCOs to mitigate their tax burden when organizing international congresses and conferences in France. Feel free to send us a message or dial +33-261-536-544 for further guidance on your upcoming event.