Artistic services

The following explanations refer to miscellaneous services (as per Section 3 (9) UstG), such as performances and lectures, provided by artists based abroad to clients based in Germany.

Information on the taxation of deliveries of works of art and on remuneration for the granting of rights of use can be found here:

Deliveries of works of art from other countries to Germany

Granting of rights of use by artists based abroad to licensees based in Germany

Please note!
Performing artists in particular may be subject to employment relationships, i.e. permanent positions. The following explanations apply only to artists who are self-employed or perform independent work in Germany.

When artists based abroad provide services (such as performances, lectures etc.) to clients based in Germany, the question of whether these clients are businesses/cultural institutions/associations (B2B: Business to Business) or private individuals (B2C: Business to Consumer) makes a difference.

As with all cross-border transactions, it is necessary to determine the country in which value added tax must be paid (where) and who must pay this tax (who).

Please note: EU – third country (outside the EU)
Under German law, whether the artists based abroad reside in a Member State or a third country (outside the EU) plays a role neither in determining where the value added tax must be paid (where) nor who is liable to pay the value added tax (who).

B2B refers to a delivery or miscellaneous service performed by a business person in return for a fee within the scope of his or her business. Artists are also usually business persons.

If clients who are based in the EU do not use a VAT ID number in transactions with an artist, the artist can generally proceed on the assumption that the clients are not business persons unless informed otherwise (Section 3a.2. UStAE). In this case, the explanations regarding Business to Consumer (B2C) transactions apply. 

A VAT ID is assigned to any business person within the EU upon request (only in his or her own country of residence) and is regarded as an attribute of a person's entrepreneurial status.
The VAT ID must be checked at the time of delivery.

In which country must value added tax be paid (where)?

Three distinct principles apply when determining the place of performance: the Registered Place of Business principle, the Place of Supply principle and the Place of Performance principle. The Place of Supply principle and the Place of Performance principle are of particular importance with regard to B2B transactions.

Place of Supply principle

Independent artistic services are generally performed where the recipient of the service operates his/her business, in this case the company based in Germany (Place of Supply principle Section 3a (2) UStG). 

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The contract is concluded between two businesses (artist and company) (B2B). There is no exception and the place of performance depends on the Place of Supply principle pursuant to Section 3a (2) UStG. The place of performance is Germany, as the company is based in Germany. German value added tax must thus be paid to a German tax office.

Who has to pay value added tax (who)?

In the case of miscellaneous B2B services, the recipient of the service, i.e. the client (customer) must pay the value added tax (cf. Section 13 b (5, 1, 2) No. 1 UStG), unless an exception applies. This procedure is called the reverse-charge procedure.

In the case of miscellaneous services rendered by a business (artist) based abroad to a business based in Germany (orchestra), the recipient of the service is liable to pay the value added tax to the German tax authorities (Section 13 b (5,1,2) UStG)

Notes on invoicing:
No value added tax is listed on the invoice. The Greek artist should list his own VAT ID, the organiser's VAT ID and a note referencing the reverse-charge procedure. The recipient of the service in Germany should therefore request a VAT ID to pass on to the service provider (the artist) (Section 3a.2. UStAE). Otherwise, the artist runs the risk of having to pay the value added tax again, depending on the activity in Germany (Place of Performance principle) or abroad (Registered Place of Business principle). 
The VAT ID must be checked for validity at the time of performance.

Sample wording regarding tax liability:
This invoice is issued without value added tax, as in this case the reverse-charge procedure applies (reverse-charge procedure pursuant to Section 13 b (5) UStG). The value added tax must be declared and paid by the recipient of the service (tax liability of the service recipient).

Note on the small business regulation:

• It does not matter whether the recipient of the service is a small business owner pursuant to Section 19 UStG, cf. Section 19 (1) (3) UStG. He or she must pay the value added tax for the performance in Germany by the artist based abroad regardless of his or her status as a small business owner. The recipient of the service must request a VAT ID from the Federal Central Tax Office for this purpose. Applying for the VAT ID does not automatically lead to the loss of one's small business status.
• Until 31 December 2024, it is also irrelevant whether the artist uses the small business exemption in his or her country, as only German VAT law applies and thereafter the small business regulation only applies to artists and entrepreneurs established in Germany (cf. Section 19 (1) UStG).
• From 1 January 2025, the small business exemption will also apply to entrepreneurs and artists based in other EU Member States, provided that their total turnover in the European Union (turnover from third countries is irrelevant) does not exceed 100,000 euros per year. However, the national thresholds in the respective member states in which the delivery or service is performed must be observed. In Germany, this will be 25,000 euros from 1 January 2025. This new regulation is referred to as the EU small business regulation. It can then no longer be utilised if the amount exceeds 100,000 euros per year. There will be a procedure for utilising the EU small business regulation. It is expected that EU-based small businesses will have to register in an electronic procedure that each member state will regulate itself. Turnover will then probably have to be reported quarterly to ensure that the EU-wide turnover limit of 100,000 euros is not exceeded. 
• To invoke the EU small business regulation in Germany, the national thresholds in the respective member state in which the delivery or service is performed must also be observed. In Germany, the threshold will be 25,000 euros for the previous year and 100,000 euros for the current year from 1 January 2025. This means that small businesses from abroad may have a maximum VAT-exempt turnover of 25,000 euros in Germany. Presumably, it will then be the case that the reverse charge procedure (Section 13b UStG) won’t apply at all if the turnover of the small business owner from abroad in Germany doesn’t exceed 25,000 euros. In terms of procedure, it is still unclear when, for example, the recipient of the service can invoke the small business status of the person providing the service in the reverse charge procedure. It is also still unclear whether the turnover of the previous year, which must not exceed 25,000 euros, must be submitted by the supplier or whether there will be an automated procedure or a verification procedure at the Federal Tax Office (BZSt) which can be utilized by the service recipient.  
• From 2025, this will mean that artists based in Germany who do not have to pay VAT in Germany themselves because they are small businesses (or because they are exempt under Section 4 No. 20a UStG) may no longer have to pay VAT as service recipients when they buy services by so-called EU small businesses from other EU countries.

Note for cultural institutions and artists exempt from value added tax (pursuant to Section 4 No. 20 a UStG):

• When it comes to tax liability, it does not matter whether the recipient of the service provides VAT-exempt transactions in Germany (e.g. according to Section 4 No. 20 a UStG). He or she must pay value added tax in Germany for the service provided by the artist based abroad, irrespective of his or her exemption status. The recipient of the service must request a VAT ID from the Federal Central Tax Office for this purpose. Applying for the VAT ID does not automatically mean that the exemption concerning his or her own income no longer applies.
• However, the recipient of the service does not have to pay value added tax for services provided by the artist based abroad if these services are tax-exempt under German value added tax law. The regulations pertaining to VAT-free transactions are also applicable to artists based abroad. In practice, the tax-exempt transactions defined under the following regulations are most relevant in this regard:
  • Section 4 No. 20 a UstG: actors, theatre groups, dancers etc., provided that they perform the same cultural services as theatres;
  • Section 4 No. 20 b UStG: organisers
  • Section 4 No. 22 UstG: to a certain extent, workshops organised by non-profit associations, provided that the proceeds are used mainly to cover costs or, in the case of cultural events, that the fee takes the form of a participation fee;
  • Section 4 No. 26 b UStG (volunteering allowance; "Ehrenamtspauschale"): remuneration for voluntary work.

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The group from Berlin must pay value added tax for the dancer from Sweden unless the Berlin Senate Department for Culture and European Affairs certifies that the Swedish dancer fulfils the same cultural mandate as a theatre according to Section 4 No. 20 a UStG and that the tax office thus considers her income to be exempt. In practice, it is advisable for the dancer to grant the group power of attorney and for the group to submit a corresponding application on behalf of the dancer (see "Notes on the application process) to the competent state authority (often the local cultural office).

Important!
Even groups and theatres that are subject to value added tax may submit such an application on behalf of an artist based abroad.

Notes on the application process:

• Although applications need not follow any particular form, the following information should be included:
  • the names and addresses of the artists or associations in question and
  • the location and date of the performance;
  • a short biography, list of artistic activities and press releases about the artists in question.
• The application for the certificate pursuant to Section 4 No. 20 a UStG must be submitted to the competent state authority (all Websites are only available in German):
                   

                 Baden-Wuerttemberg 
                 Bavaria
                 Berlin
                 Brandenburg
                 Bremen
                 Hamburg
                 Hesse
                 Mecklenburg-Western Pomerania
                 Lower Saxony

                 North Rhine-Westphalia: 
                 District Government Cologne
                 District Government Münster
                 District Government Arnsberg
                 District Government Düsseldorf
                 District Government Detmold

                 Rhineland-Palatinate
                 Saarland
                 Saxony
                 Saxony-Anhalt
                 Schleswig-Holstein
                 Thuringia

• The certificate can be issued retroactively for a period of four years, i.e. until the statute of limitation on assessment (Feststellungsverjährung) according to the rules of the German tax code (Abgabenordnung; AO) has expired.
• If foreign theatres and orchestras or even individual artists are to perform at different locations in Germany, a certificate from the state authority in whose catchment area the foreign theatre/orchestra or individual artist first becomes active in Germany is sufficient, e.g. in the case of a tour: location of the first performance.

Note on invoicing:
No value added tax is listed on the invoice. The Swedish artist should list her own VAT ID, the group's VAT ID and a note referencing the reverse-charge procedure. The recipient of the service in Germany should therefore request a VAT ID to pass on to the artist providing the service (Section 3a.2. UStAE). Otherwise the artist runs the risk of having to pay the value added tax again in her country.   
The VAT ID must be checked for validity at the time of performance. A note referencing the exemption pursuant to Section 4 No. 20 a UStG will not be added to the invoice.

Sample wording regarding tax liability:
This invoice is issued without value added tax, as in this case the reverse-charge procedure applies (reverse-charge procedure pursuant to Section 13 b (5) UStG). The value added tax must be declared and paid by the recipient of the service (tax liability of the service recipient).

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The term B2C is used when the recipient of the service is not a business person (Business to Consumer).

In which country must value added tax be paid (where)?

As previously mentioned, three distinct principles apply when determining the place of performance: the Registered Place of Business principle, the Place of Supply principle and the Place of Performance principle. 

Place of Performance principle

In the case of cultural, artistic, scientific, educational etc. services provided to a private individual (B2C), the place of performance is determined based on the Place of Performance principle, i.e. the place where the service is actually performed. This also applies where the artist or group performing is/are also responsible for organising the performance (Section 3a (3) No. 3a UStG).

Who has to pay value added tax (who)?

The reverse-charge procedure pursuant to Section 13 b (5) UStG does not apply to transactions with private individuals. In this case, the following principle applies: the person who provides the miscellaneous service and issues the invoice (or who sells admission tickets to private individuals) is liable to pay the value added tax (Section 13 a (1) No. 1 UStG).

Accordingly, the group from Hungary and the performer from Italy must pay German VAT in Germany. However, they do not have to register for tax in Germany (as in the past). Instead, they can participate in the so-called One-Stop-Shop procedure, which has also applied to artistic performances since June 2021. Each EU country has its own portal for this. Registration takes place via the portal of your own country of residence. More information on this shortly.

Note on invoicing:
German value added tax is listed on the invoice and, as explained above, must be paid to the German tax authorities by the artist based abroad.

Note - electronic services
For electronic services (e.g. ticket sales for self-organised online workshops or live streaming events), the delivery threshold regulation applies. More info here.

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