Are services related to the musical and artistic ambiance of events eligible for VAT exemption?

Music and artistic events scene and VAT

The applicant, acting as an individual, provides services relating to the musical and artistic ambiance of special events, such as weddings. His activities were classified under code PKWiU 90.01.Z. “Activities relating to the staging of artistic performances”. As part of his services, the man acts as a DJ, presenter and master of ceremonies, also providing all necessary musical equipment, lighting and additional accessories. In addition, he creates original event settings, developed in consultation with clients, which include themed dances, performances and other attractions.

The taxpayer believed that his services could be classified as cultural services provided by an individual creator or artist within the meaning of the provisions on copyright and related rights. He argued that the remuneration for these services constitutes a fee for the transfer of copyright or artistic rights, which, in his view, entitles him to VAT exemption under Article 43 1 point 33 letter b) of the VAT Act. In order to obtain official confirmation of his position, the entrepreneur asked the tax authorities to issue an individual interpretation on this matter.

VAT exemption – KIS interpretation

The Director of KIS considered the position presented to be correct and confirmed that the services described in the application may benefit from VAT exemption.

The tax authority justified its interpretation by referring to the relevant provisions of the VAT Act and the Copyright and Related Rights Act. According to Art. Section 43 1 point 33 letter b of the VAT Act, cultural services provided by individual creators and artists, remunerated in the form of royalties, are exempt from tax. Furthermore, the authority indicated that the subject matter of copyright can be any manifestation of creative activity, which also includes activities related to the creation of artistic and musical environments.

The KIS then analysed in detail the services provided by the applicant, which include musical and artistic support for events, including acting as a DJ, presenter and master of ceremonies. The authority emphasised that these services are of a cultural nature because their result constitutes a work within the meaning of the Law on Copyright and Related Rights. They therefore meet the conditions for exemption from VAT, provided that there are no conditions excluding this exemption, as specified in Article 43(19) of the VAT Law.

“Therefore, taking into account the description of the case presented and the legal provisions to which it refers, it should be noted that since the services provided by you described in the application constitute cultural services referred to in art. Section 43 19 of the Act, and which you provide as an individual creator or performer within the meaning of the Copyright and Related Rights Act, receiving remuneration in the form of a fee, these services are exempt from VAT under art. Section 43 1 point 33 letter b of the Act.” – concluded the authority.

Source: Individual interpretation of August 2, 2024, Director of National Tax Information, ref. 0111.KDIB3-2.4012.246.2024.2.ASZ