The Tax Department has issued a new circular clarifying when VAT should be charged on entry to concerts, performances, exhibitions and other cultural events, particularly when admission is combined with food or drink.  

The move, set out in Circular 6/2025 and signed by Tax Commissioner Sotiris Markidis, beginning of October, aims to bring consistency and fairness to the system, eliminating distortions and cases where citizens have paid more VAT than they should due to misinterpretation by businesses. 

Under the new guidance, a reduced VAT rate of 5 per cent applies to tickets for concerts, theatrical performances, fairs, exhibitions, circuses, amusement parks, museums, zoos, cinemas and similar events, provided that catering services are not included.  

As explained in the circular, a concert is considered an event of artistic nature which may take place in a theatre, amphitheatre, stadium, concert hall, fairground, parking area, beach, school hall or any other suitable venue.  

Therefore, concert tickets that do not include food or drink are taxed at the 5 per cent rate. 

Similarly, the same rate applies to artistic events held in private venues, such as hotels or entertainment halls, as long as the entrance ticket does not include restaurant or catering services.  

In fact, the circular makes clear that the reduced rate covers both seated and standing arrangements, whether the performance is live or pre-recorded. For instance, someone attending a concert in a hotel ballroom without any inclusion of food or drink in the ticket price will still be charged only 5 per cent VAT. 

However, when admission to a concert, performance or other event also includes food, drink or catering services, the entire transaction becomes subject to 9 per cent VAT.  

This applies even if the customer does not consume everything offered but pays a single price for the full package. In other words, a Sunday lunch with live music, a festive dinner accompanied by a band, or a dinner show featuring a well-known singer are all taxed at 9 per cent, regardless of where the person sits or how much they consume. 

Moreover, the circular refers to a ruling of the European Court of Justice on composite transactions, where a single ticket includes both the right of entry and other benefits such as drinks.  

In such cases, the applicable VAT rate depends on the main element of the transaction, essentially, what the consumer primarily pays for and enjoys.  

If the main purpose is the right of entry, then the 5 per cent rate applies. If, in contrast, food or drink form a substantial part of the offer, the 9 per cent rate must be imposed. 

In cases where admission and catering are charged separately, each part is taxed independently, 5 per cent for entry and 9 per cent for catering.  

Furthermore, the circular clarifies that when catering is clearly optional and separately priced, the reduced rate for entry remains valid, ensuring fair and transparent treatment for both event organisers and consumers. 

In addition, a 3 per cent VAT rate now applies to the first public performance, or premiere, of theatrical, musical or dance.  

Any subsequent performances of the same piece are taxed at 5 per cent.  

However, this lower rate does not apply to concerts or musical events held in entertainment venues, which remain subject to either 5 or 9 per cent depending on whether food or drink is offered. 

Meanwhile, cultural services provided by public law bodies or non-profit cultural organisations continue to be exempt from VAT altogether.  

Finally, the circular points out that when municipalities, local authorities or charitable foundations organise ticketed events that could distort competition with private organisers, the obligation to register and pay VAT should be carefully assessed.