1. Introduction

The promotion of dances is a taxable activity liable to VAT at the standard rate. There are special arrangements for dances held on licensed premises. Dances that are promoted in the course or furtherance of business come within the scope of VAT liability and the promoter is obliged to register and account for VAT where his or her annual receipts from taxable activities (including the promotion of dances) exceed or are likely to exceed €37,500.

2. General Rules

While there is no definition in the Value Added Tax Consolidation Act 2010 as to what constitutes a ‘Dance’ it includes all public dances, that is, functions or gatherings where the principal activity is dancing, and which are open to the public on payment of an admission charge, or on pre-purchase of a ticket. Examples of what constitutes a Dance are functions arranged and promoted as dances, and activities consisting of dancing carried on in nightclubs, discotheques, public houses, and similar establishments.

It should be noted that a dance can be regarded as taking place irrespective of the venue involved or whether the dance music consists of a live musical performance by a band or services supplied by a DJ.

3. Functions and Activities Not Treated as Dances

3.1 Certain Live Musical Performances

A live musical performance by a band will not be regarded as a dance where the following conditions apply;

• The venue is configured for a musical performance e.g. there is a stage area that enables the patrons to watch and listen to the performance by the band.
• The patrons have access to a designated seat or sufficient seating that, if they wish, enables them to be seated during all or part of the performance.
• The Dancing carried on is incidental to the live musical performance by the band.
• Dancing will be regarded as incidental where, for example, the floor area allocated to that activity is small by comparison to the area of the venue devoted to patron seating for the musical performance.

3.2 Functions Involving the Consumption of Food and Drink and the Provision of Facilities for Dancing

Functions such as Dinner Dances, Christmas party nights and similar events which involve the supply of a substantial meal e.g. a four course meal, to patrons attending a dance are not treated as a dance but regarded as a composite supply of services the principal supply involved being the meal. The rate of VAT applicable to the admission fee is therefore the second reduced rate. Sales of alcoholic drink are liable to VAT at the standard rate.

3.3 Occasional Dances for Fund Raising Etc.

Dinner dances held in hotels or other licensed premises for fund-raising purposes and not in the course or furtherance of business (for example benefit dances organised by charities or clubs on an occasional basis) are outside of the scope of the provisions. In these latter cases the hotelier or licensee is not regarded as the promoter of the dance (See Paragraph 4) and is, therefore, liable only in respect of the receipts relating to the services supplied - for example, meals, drinks, etc.

4. Dances in Licensed Premises

4.1 Dances Promoted by the Liscensee

Where a dance is held on a premises licensed for the sale of intoxicating liquor and the licensee is the promoter of the dance he/she will account for VAT due on the admissions, in addition to any sales of food and drink, in the normal way.

4.2 Dances Promoted by Non-Licensees

Where a person other than the licensee promotes public dances on the licensee's premises liability for the VAT chargeable remains with the licensee. The promoter is not the person accountable for VAT in these circumstances. Accordingly, the licensee would need to ensure that s/he takes appropriate steps to ensure that s/he is in a position to make the appropriate returns and pay over the tax chargeable to the Collector-General. In this regard, since the promoter's records are subject to examination by Revenue officers, the licensee might consider agreeing with the promoter on right of access to the promoter's relevant records.

5. Taxable Amount

The amount on which tax is chargeable is the total consideration received in connection with the dance. This includes the amounts paid by those admitted to the dance together with any other consideration received in connection with the dance. As already mentioned, the obligation to account for the tax is the responsibility of the licensee, notwithstanding such amounts may be received or receivable by a promoter or other person.

Where persons are admitted to dances for amounts less than the face-value of the ticket or where no admission is charged (complimentary tickets) the normal VAT rules apply and only the amount actually payable will attract liability.

6. Deductible VAT

A VAT-registered dance promoter or a licensee is entitled to take credit or deduction against his or her VAT liability for the VAT charged on goods and services purchased in connection with the dance. It is a requirement of the VAT system that to take credit or deduction, the VAT registered person must be in possession of proper VAT invoices made out to him or her. Subject to this requirement, the licensee would be able to take credit for VAT charged and invoiced on the printing of tickets, spot prizes, advertising, light, heat, bands or groups, and other qualifying expenditure connected with the dance.

Deductions are not allowable unless the invoices are made out in the name of the licensee. Where the expenses are incurred by and the charges are invoiced to somebody other than the licensee, deduction against the licensee's liability will not be allowed.

7. Further Information

Enquiries regarding any issue contained in this Information Leaflet should be addressed to the Revenue District responsible for the taxpayer's affairs. Contact details for all Revenue Districts are available on the revenue website at: Contact Details

This Information Leaflets issued by:

VAT Interpretation Branch,

Indirect Taxes Division,

Stamping Building,

Dublin Castle.

December 2012

Source: Revenue Commissioners. www.revenue.ie Copyright Acknowledged.