This article presents:


The Value Added Tax, or VAT, in the European Union is a general, broadly based consumption tax assessed on the value added to goods and services.

  • general tax that applies, in principle, to all commercial activities involving the production and distribution of goods and the provision of services.  However, if the annual turnover of this person is less than a certain limit (which differs according to the Member States) the person does not have to charge VAT on their sales.
  • A consumption tax because it is borne ultimately by the final consumer. It is not a charge on businesses.charged as a percentage of price, which means that the actual tax burden is visible at each stage in the production and distribution chain.
  • Collected fractionally, via a system of partial payments whereby taxable persons (i.e., VAT-registered businesses) deduct from the VAT they have collected the amount of tax they have paid to other taxable persons on purchases for their business activities. This mechanism ensures that the tax is neutral regardless of how many transactions are involved.
  • Paid to the revenue authorities by the seller of the goods, who is the “taxable person”, but it is actually paid by the buyer to the seller as part of the price. It is thus an indirect tax.

Source: European Commission

The live music sector is international. It can thus be difficult to grasp all the VAT requirements of each country and to understand what is submitted (and what is not) and in which national fiscal system, like in the context of a European tour for instance.

European Festivals Association (EFA) and PEARLE have released a clear and simple guide to VAT in the live music sector in an international context, giving resource and knowledge on VAT systems to live music professionals.


  • With the rise of broadcasted live music events during lockdown, PEARLE* have issued a statement for an equal treatment of physical and online performances for low VAT rates: “As regards online performances, given the type of the organisations and companies, which are SMEs, often with a non-profit legal status, given the similarity between an online and physical performance, the role of culture and access to all people in society, the minimal risk of distortion of the market, the potential administrative burdens, the high labour-intensity of the sector, the strong need for support towards the recovery of the sector, there are cleararguments for anequal treatment of physical and online performances in the frame of Council Directive 2006/112/EC as regards rates of VAT”. Read PEARLE*’s statement here.
  • The national recovery plans for culture in the context of the COVID-19 crisis have had in some countries an impact on some VAT rates. Decreasing VAT rates, even only for a certain period of time, can help financially the sector and encourage audiences to come back to see live music events. For instance, in the UK in the March 2021 national budget, the reduced 5% cultural VAT rate on tickets (reduced from 20% for rock/pop/commercial music in July 2020) was extended until 31st September 2021, then it will rise to 12.5% for six months until April 2022. Similar measures were adopted in Norway where the submission deadlines for paying the VAT were delayed in 2020 and 2021, allowing live music organisers to better manage their liquidity in this time of crisis.


When governments work on VAT schemes, live music venues or representative associations are not necessarily part of the negociations. This can result in unfitted laws for a sector that is economic as well as social and cultural. Through public campaignsopen letters to policy makers, dialogue with territorial and fiscal institutions or protests, there are various way of starting a discussion on VAT policy.


4 rates apply for the Performing Arts sector:

  • General rate: 20% (purchase and selling of goods)
  • Reduced rates: 10% (catering)
  • Concert tickets: 5,5%
  • Super-reduced rate: 2,1% (for 140 first productions of a same show + ticketing)


Organisations of general interest may be exempted from VAT. Sometimes, it is economically more interesting for a venue of general interest to be subject to VAT (and to deduce VAT from what they buy). This depends on the activity of the venue. A venue’s restaurant or bar might be more interested in being subject to VAT, while it might be less interesting for the mediation department. In France, it is possible to “sectorise” your activity: be subjected to VAT for part of your activity, and be exempted from VAT for other parts.

The rule of the 4P:

In order to establish if an association needs to be submitted to VAT, the organisation needs to be of “disinterested management” (i.e. the executive board is volunteers or unpaid) and competes with the commercial market. Then, fiscal institutions apply the “4P rule”: Product, Price, Publicity and Public. These 4 criteras make the difference between a commercial organisation and one of general interest.

The service given by the organisation is considered of social utility if it takes into account something not provided by the commercial market.The organisation must put efforts in ensuring financial accessibility to its services, notably by offering a lower price of entrance then of lucrative sectors.
The organisation should also focus on “unprivileged audiences” in its activities, who no not usually or easily have access to such services.The communication around the orgsanition’s activity must not consist in commercial publicity.

Commercial rules for cultural organisations?

In 1998, several music federations, including FEDELIMA, joined forces to make the government take into consideration the specificity of the cultural sector. In collaboration with the French Ministry of Economy and Finance, the organisations developped technical sheets on the not-for-profit criteria of live music venues. These technical sheets helped venues to see clearer in this system, and sensitized fiscal institutions in recognising specificity of cultural organisations, which are not in the commercial market.

VAT and the creation of UFISC

The organisations who worked on the VAT technical sheets then created the UFISC, a French representative organisation for the cultural sector. UFISC has expanded this collaborative thinking to encompass employment, then management methods particular to this sector, to finally arrive at the claim for a specific socio-economic space, around shared values such as solidarity and general interest.


A public campaign to protest against the VAT increase on concert tickets:

In September 2012, the Spanish government increased the VAT on concert tickets to 21% (it was 10% before). In reaction, the music sector started a campaign to protest against this increase. The campaign lasted several years where ACCES, the national association representing live music venues, was in dialogue with public authorities. The 20th of May 2015 was the “Día sin música” (Day without music) in Spain: a day where venues closed down and artists did not perform to raise awareness on the VAT increase. In June 2017, the music sector succeeded in making their voice heard as government decreased VAT on concert tickets back to 10%!