The term ‘Metaverse’ is a concept that is now being widely discussed. Like a virtual world, users live as digital representations of who they really are. This technology could result in the extinction of traditional conferencing platforms and the adoption of virtual environments in which our incarnations would interact with those of various other people. How would such virtual reality services be treated for VAT purposes is an interesting debate as to whether they should be considered just like other digital services. Broadly, there are two types of pertinent services to be analyzed, namely, 

·      Electronically Supplied Services and

 ·      Admission to Events

As per the EU VAT laws, “Digital Services” or “Electronically Supplied Services – ESS” would need to have the following features:

 ·      Delivery over the internet or an electronic network

 ·      Highest level of automation with the least amount of human intervention and

 ·      Impossible to deliver in the absence of information technology.

 More automation and very little human interaction, therefore, are crucial factors in determining whether an activity can be classified as an “ESS” or “digital service.” For instance, a virtual activity in which participants can enter the virtual space for any purpose, such as a conference or exhibition, online events that are pre-recorded, etc., but without any real-time interaction with the organizer (human intervention), could be considered as a “digital service/ ESS”. Under EU VAT laws, digital services are taxed at the location of the customer on a reverse charge basis.

 On the contrary, a virtual seminar with real-time interaction with the faculty and between the participants may not qualify as a digital service/ ESS, since there is much human intervention involved in the process. 

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