Finland’s events industry braced for VAT ‘disaster’

Finland’s events industry is bracing for a VAT “disaster” that could cause the industry “an additional bill of millions”.

The Finnish government announced earlier this year that VAT on tickets for cultural and sports events will rise from 10% to 14% from 1 January 2025.

It has now emerged that such organisers may have to pay the higher VAT rate for tickets sold at the end of 2024 before it even comes into effect.

The country’s Tax Administration says the tax rate applied to tickets would be determined according to the settlement date agreed between the ticket sales company and the event organiser. If ticket money does not reach the event organiser before the turn of the year, the 14% tax rate will be applied.

Increased VAT may not be requested from the customer, as the tax rate must be based on the applicable law, it added.

“In terms of ticket sales, the end of the year is the best season of the whole year. At the turn of the year, ticket sales companies have up to two or three months worth of ticket money in their customer reserve accounts. It is completely unreasonable that for that sale one would have to pay almost half more value added tax than what the customers have paid for their tickets,” states Mirva Merimaa, CEO of the ticketing company Tiket.

“It is completely unreasonable that for that sale one would have to pay almost half more value added tax than what the customers have paid for their tickets”

“In practice, when there is a delay in the payments received through different payment intermediaries, we should close the ticket office at Christmas, so that the payments can reach our own accounts with certainty before the turn of the year.”

Juhana Stenbäck, CEO of the ticketing company Lipppupiste, backed by CTS Eventim, adds: “As a ticket sales company, we would be taking an absolutely huge business risk if we billed the organisers for all the ticket money before the event, contrary to the normal practices of the industry. We act in our role to protect consumers and their money. It is contrary to common sense and legal sense that this protection of consumers’ interests is causing the industry an additional bill of millions.”

Sami Kerman, CEO of the Event Industry Association, says: “Considering the small margins of the industry, this one technical tax interpretation will have a catastrophic effect on the profitability of the entire next year. In addition, the tax increase itself will cause a decrease in demand, which is apt to plunge the industry into recession.”

The Event Industry Association (Tapahtumateollisuus) – which represents companies including Fullsteam Agency, Live Nation Finland, Warner Music Live and Lippupiste – has been lobbying the government to revoke the tax increase.

Failing that, the association has asked for the increase to be postponed “until the VAT Act has been reformed to take into account the established, consumer-friendly practices of the events industry”.

The Dutch event industry recently claimed a partial victory after a proposed tax hike for the cultural and creative market was shelved for the time being.

The government this year announced plans to raise the VAT rate for the sector by 9% to 21% from 2026, which would lead to a €350 million annual loss in income for the sector.

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