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A hospitality company inquired whether entry to its nightclub featuring DJs should be taxed at 10% or 21% VAT, and who is entitled to a refund in the event of a correction. The DGT ruled that the entry service is subject to 10% VAT as it constitutes a cultural performance, and that the company is not entitled to receive a direct refund of the fees passed on in excess.
This ruling clarifies the applicable VAT rate for nightclub entry services involving live music and establishes that companies cannot directly reclaim VAT incorrectly charged to customers through a refund of undue income, as the right to a refund belongs to the consumer.
The tax team reviews your specific situation.
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