9.5.1 The definition of voucher in the EU VAT Directive

From 1 January 2019, Article 30a of the EU VAT Directive provides for the following definition of voucher:

‘voucher’ means an instrument where there is an obligation to accept it as consideration or part consideration for a supply of goods or services and where the goods or services to be supplied or the identities of their potential suppliers are either indicated on the instrument itself or in related documentation, including the terms and conditions of use of such instrument.

In this definition, the requirement that a supplier of goods or services has to accept that instrument ‘as consideration or part consideration’ for a supply of goods or services raises the question whether instruments that are issued for no consideration qualify as ‘vouchers’ under that definition.

The answer to this question is relevant because if a voucher qualifies as ‘consideration or part consideration’ in the ‘EU VAT sense’ of the concept, the (or rather: a) value of the voucher will have to be included in the taxable amount for the underlying transaction (see below), whereas if the voucher only embodies a ‘discount’, the value of the voucher will be excluded from (and therefore lower) the taxable amount for the underlying transaction. This is a crucial difference, as I will now explain.

It could be argued that the EU VAT definition of ‘voucher’ is clarified on this point by the text of the fourth preamble to the EU Directive that amends the EU VAT Directive as regards the VAT treatment of vouchers: “Only vouchers which can be used for redemption against goods or services should be targeted by these rules. However, instruments entitling the holder to a discount upon purchase of goods or services but carrying no right to receive such goods or services should not be targeted by these rules”.1 This preamble seems to suggest that the EU VAT definition of voucher also refers to vouchers that are issued free of charge and that can be redeemed for goods or services (without any additional payment).

Where the supplier of goods or services that accepts the voucher in the above example has also issued that voucher for consideration (i.e. against payment), I think it is obvious that the amount received for issuing the voucher should be considered to be (part of the) consideration for the actual underlying supply for which the voucher is redeemed. This is also clear from the relevant EU VAT rules regarding the treatment of voucher transactions.2 The same applies to situations where the business that ‘actually’ supplies the goods or services in return for the voucher is reimbursed for accepting that voucher by the issuer of the voucher. In all these situations, the consideration received for the voucher is included in, or considered to be the consideration for, the actual supply of the goods or services for which it is redeemed.

This is different for situations where the business making the actual supplies accepts a voucher that it issued for no consideration or where the business that accepts a voucher is not reimbursed for doing so by the issuer of the voucher. In those cases, the voucher cannot be qualified as ‘consideration’, in the sense of the EU VAT concept, for the supply of the goods or the services. Accepting the voucher only causes the actual consideration received by the supplier of the goods or services to decrease by the amount of the (face) value of that voucher, including where the actual consideration received is reduced to nil, i.e. the face value of the ‘discount voucher’ is equal to or exceeds the advertised price or market value of the supply. In these cases, the voucher, in my view, does not represent ‘consideration’. Consideration is what businesses receive in return for a supply of goods or services. Article 73 of the EU VAT Directive stipulates that the taxable amount includes everything that constitutes ‘consideration obtained or to be obtained by the supplier, in return for the supply’. Businesses that accept ‘free’ vouchers do not obtain any consideration in return for their supplies to the amount represented by the ‘free’ vouchers.

From a non-VAT perspective, it can be argued that the supplier has an obligation to accept the discount voucher ‘as consideration’ for his supply, because, from the perspective of the customer redeeming the voucher he can either pay the full price in cash or part of the price in cash and ‘pay for the rest’ with his voucher. However, from the perspective of the supplier accepting the voucher, who is the party to the transaction that determines the taxable amount,3 the discount voucher is not a consideration – if anything, it lowers the consideration received, but it is not ‘included in it’ nor does it represent a consideration. It represents the right of the holder to a discount. This means that, in my view, ‘free’ vouchers that have to be accepted by a supplier of goods or services in lieu of (part of) the advertised price of those goods or services do not qualify as ‘vouchers’ under the EU VAT definition in Article 31a of the EU VAT Directive.

Based on the above, I disagree with the Dutch State Secretary of Finance where he explains that free vouchers that are provided with the supply of a product, where the voucher entitles the holder to obtain a specific good or service without additional payment, qualify as vouchers under the EU VAT definition.4

Looking closer into the definition of voucher and what constitutes a voucher, one of the recitals to an earlier draft of the amending directive specifically mentioned that: “The provisions (i.e. the new voucher rules, JB) should not trigger any change in the VAT treatment of transport tickets, admission tickets to cinemas and museums, postage stamps and similar non-vouchers”.5 The last part (“non-vouchers”) was deleted in the final version. Unfortunately, this adjustment was only explained as follows: “Recital 5 has been modified to better reflect the positions of Member States regarding the scope of the amending directive and the definition of vouchers (which is set out in Article 30a)”.6 In my view, these transport tickets, admission tickets and postage stamps are excluded from the new voucher definition because they do indeed not qualify as “an instrument where there is an obligation to accept it as consideration or part consideration for a supply of goods or services”. In the period between the first voucher proposal and this version, the ECJ decided that payment for these ‘tickets’ should be considered prepayment for services, and that these services are considered to be ‘fulfilled’ by enabling the recipients/customers to benefit from them.7 Hence, a museum ticket is not an instrument that a museum has to accept as consideration for admitting the holder of the ticket, but rather a proof of prepayment for granting access to the museum, a service that seems to be performed when the museum opens its doors to people holding tickets (regardless of whether they show up or not).

Given the fact that discount vouchers and certain documents evidencing (pre)payment for services8 are no longer included in the new rules for the VAT treatment of vouchers, that a voucher is “accepted as (part) consideration” and that for certain vouchers, Article 73a of the EU VAT Directive dictates that “the monetary value as indicated” on the vouchers is used for determining the taxable amount for the “the supply of goods or services provided”, it seems safe to assume that the new rules only apply to vouchers that are issued and transferred for consideration (i.e. not for free), and that have a specific face value or nominal value.

Even though in my view, the definition of ‘voucher’ in Article 30a of the EU VAT Directive does not apply to free vouchers, I will discuss the VAT treatment of free vouchers under that definition because at least one EU Member State (the Netherlands) is of the view that free vouchers are also covered by that provision.