Event agency in 2026: deposits, VAT and subcontractors

Quick answer. An event agency bills services: VAT is due on collection, so as soon as a deposit is received. Since 1 January 2023, VAT is also due on collecting a deposit for deliveries of goods. A customer deposit (often 30-50% on order) therefore triggers output VAT. Managing deposits, supplier subcontracting and per-project cash flow is at the heart of the trade.

An event agency's model rests on three realities: deposits collected before the service, a chain of suppliers (caterer, technical, security, rentals) to coordinate and pay, and a cash-flow gap per project. Each has accounting and tax consequences, set out here.

Recently, a growing agency consulted us after an inspection: it declared VAT only on the final event invoice, although it had collected deposits months earlier. The correction covered the VAT on undeclared deposits. Here is how to secure these flows.

The principle for a service#

For services, VAT is due on collection of the price or a deposit (unless the agency opts for the "débits" method, which makes VAT due on invoicing). An event agency collecting a deposit on order must therefore charge VAT on the amount collected, even if the event has not yet taken place. The chargeable event and chargeability of VAT are set by article 269 of the French tax code.

The 2023 reform for goods#

Since 1 January 2023, VAT is also due on collecting a deposit for deliveries of goods (aligned with article 65 of the VAT directive). This matters if the agency resells or rents equipment: a deposit on a precisely-designated good triggers VAT.

Table: when is VAT due?#

Recording a deposit follows a simple two-step logic:

1. On collecting the deposit: cash is recorded against account 4191 "Customers - advances and deposits received on orders" and output VAT (account 44571) is recognised on the deposit. Revenue is not yet recorded.
2. On delivering the event: the final invoice recognises revenue (account 706), clears the deposit account 4191 and the VAT on the balance.

This avoids inflating turnover before the event and ensures VAT is declared at the right time.

An agency coordinates many suppliers: caterer, sound and light, security, hosts, equipment and venue rental. Their invoices are expenses (subcontracting, accounts 604 or 611), and the input VAT is deductible. When the agency re-invoices the overall service to its client in its own name, it charges VAT on the total price, then deducts the suppliers' VAT: only the margin economically bears the tax.

Running this chain well requires rigorous bookkeeping and close tracking of the VAT rate on each invoice.

Organising an event falls under the standard 20% rate. Some components billed separately may fall under another rate: on-site catering follows its own rules. But an overall organisation service, billed as a whole, is at 20%.

Events live with a wide cash gap: deposits come in before the event, while suppliers are often paid around the date or after. Managed well, this gap funds the activity; unanticipated, it creates strain. Analytical tracking per event (revenue, supplier costs, margin) is essential, and an outsourced finance function can help fast-growing agencies.

The quote and the general terms of sale (GTS) are an event agency's first safeguards. They set the amount and timing of deposits, the fate of sums paid on cancellation or postponement, and the agency's liability limits towards suppliers.

Three clauses deserve particular attention:

1. The deposit schedule: a deposit on order, a second before the event, the balance afterwards. Each collection triggers VAT, to be declared in the relevant period.
2. Cancellation terms: specify what share of the deposit is retained depending on the cancellation date. A retained deposit is not refunded; a refunded deposit leads to a VAT adjustment.
3. Passing on supplier costs: where the agency has already committed non-cancellable suppliers, the GTS should allow their cost to be passed on to the client.

Clear GTS prevent disputes and align the accounting with the contractual reality: a retained deposit becomes revenue, a refunded deposit disappears together with its VAT. They also protect cash flow, making deposits due on set dates rather than at the client's discretion.

Deposit refunded on cancellation#

If an event is cancelled and the deposit refunded, the output VAT on that deposit is adjusted. The cancellation and refund terms should appear in the general terms of sale.

Agency under the micro regime#

A small agency under the micro regime declares turnover on collection and may benefit from the VAT base exemption below the services threshold. Under the exemption, no VAT is charged on deposits, but the suppliers' VAT cannot be recovered either.

Re-invoicing disbursements#

Amounts paid in the name and on behalf of the client (disbursements), duly evidenced, can be re-invoiced without VAT. They differ from costs incurred by the agency in its own name, which follow the service's VAT regime.

• Declare deposit VAT on collection, without waiting for the final event invoice.
• Do not record the deposit as turnover: it passes through account 4191 until delivery.
• Keep supplier invoices to deduct input VAT.
• Adjust VAT on cancellation and deposit refund.
• Track margin per event, separate from cash collected in advance.

The main source of reassessment in events is not the VAT rate but the moment it is due. Many agencies think "final invoice" and forget that a collected deposit already triggers VAT. In an activity where deposits may represent half the price and precede the event by months, the cash and compliance stakes are real.

The second pitfall is confusing cash with result: a healthy bank balance early in the year, inflated by deposits, does not mean the related events are profitable. At Hayot Expertise, we set up per-project analytical tracking, paired with a tool such as Pennylane, distinguishing deposits, revenue recognised on delivery, supplier costs and real margin.

Hayot Expertise advice. Adopt three reflexes: declare each deposit's VAT on collection, record deposits in account 4191 (not as turnover), and run each event as a mini profit centre. Your VAT returns will be accurate, your result faithful, and your cash flow steered rather than endured.