Where to pay VAT on professional training courses – CJEU rules on Swedish case
The CJEU’s judgement has again shuffled the cards as regards the place of taxation for professional training courses. Should the venue of a course be decisive?
In the Srf konsulterna AB case (C 647/17), the Court of Justice of the EU ruled that the place of taxation of a professional training course is where it actually took place. The judgement concerned a Swedish company providing professional training courses in form of seminars to its members and third parties. While most of the training courses took place in Sweden, some of them also took place in other EU member states.
The courses’ syllabi are determined in advance, but also adapted on the spot depending on the participants, who must have certain skills and professional experience in accountancy and management. Participation is subject to prior registration and payment in advance.
The training courses are provided to Swedish businesses, therefore, if the basic rule of taxation of services were applied, they would be taxed in Sweden. The Swedish tax administrator, however, expressed doubts as to whether this may also be the case of services that should be taxed at the place where the educational event takes place, i.e. the place of the admission to the educational event. The merit of the dispute thus was whether the training courses in question were subject to VAT in Sweden (according to the basic rule), or at the place of their venue (if involving an admission to an event).
The Swedish Supreme Administrative Court therefore referred to the CJEU on how to interpret the term “admission to an event” where it concerns an accounting course for entrepreneurs lasting several days and requiring registration and payment in advance.
The CJEU held that the case in question indeed involved an admission to an educational event, therefore it had to be taxed at the place of the event, regardless of the increased administrative burden for the company organising the event. The fact that the participation required registration and payment in advance was not relevant for determining the place of taxation.
The question now arises to what extent the conclusions of the Czech Coordination Committee regarding training courses for a limited range of participants remain valid. Will the above CJEU conclusion also apply to training courses organised by a parent company within the group? We will keep you informed about further developments.