vat rules — The new VAT rules significantly affect how tickets, food, and drinks are priced at various events across the country. Issued by the Tax Department in Circular 6/2025, the updated guidelines clarify when VAT applies to entry fees for concerts, exhibitions, and performances, especially when food and drink are involved.
Signed by Tax Commissioner Sotiris Markidis at the beginning of October, the circular aims to ensure consistency and fairness in the VAT system. It addresses concerns about consumers occasionally paying more VAT than necessary due to business misinterpretations.
The guidelines stipulate that a reduced VAT rate of 5 per cent applies to tickets for a range of cultural events, including concerts, theatrical performances, and exhibitions, as long as no catering services are included in the ticket price.
Vat rules: Clarification on Ticket and Catering Combinations
Importantly, the definition of a concert encompasses various venues, from theatres and stadiums to fairgrounds and even school halls. Therefore, attendees purchasing tickets solely for entry—without food or drink included—will benefit from the lower 5 per cent VAT rate.
This rule also extends to private venues, such as hotels, provided that the ticket does not include any catering services. For example, a concert held in a hotel ballroom, where food and drink are not part of the package, will still attract the 5 per cent VAT.
Implications for Combined Packages
However, if a ticket includes food or drink, the entire transaction is subject to a higher VAT rate of 9 per cent, regardless of consumption. Whether enjoying a Sunday lunch with live music or attending a dinner show, the VAT will apply to the complete package, not just the entry.
The circular also references a ruling by the European Court of Justice regarding composite transactions. When a ticket encompasses both entry and additional benefits, the applicable VAT rate depends on the primary element of the transaction. If entry is the main attraction, the 5 per cent rate applies; if food or drink is significant, the 9 per cent rate prevails.
Separately Charged Services and Exemptions
In cases where admission and catering are charged separately, the two components will be taxed independently. Admission will incur the 5 per cent rate, while catering will attract the 9 per cent rate.
Moreover, the circular clarifies that when catering is optional and priced separately, the reduced VAT rate for entry remains valid. This change ensures fairness for both event organisers and consumers, allowing for transparent pricing structures.
New VAT Rate for Premieres
Another significant update is the introduction of a 3 per cent VAT rate for the first public performance of theatrical, musical, or dance pieces. Subsequent performances will revert to the 5 per cent rate, although concerts and musical events in entertainment venues will continue to be subject to either the 5 per cent or 9 per cent rates based on the inclusion of food or drink.
Exemptions for Cultural Services
Cultural services provided by public law entities or non-profit organisations remain exempt from VAT, ensuring that these organisations can operate without added tax burdens. However, the circular advises that municipalities, local authorities, or charitable foundations organising ticketed events should carefully assess their VAT obligations to avoid distorting competition with private event organisers.
