9.5.2.2 What is an SPV?

In order for a voucher to qualify as an SPV, the place of supply of the goods or services to which the voucher relates, and the VAT due on those goods or services, have to be known at the time of issue of the voucher.1 This means that if a voucher can, for example, be redeemed in more than one jurisdiction, it does not qualify as an SPV but as an MPV. Also, the VAT due on the goods or services needs to be known at the time of issue of the voucher. This means that if a face value voucher can be redeemed at a business or a chain of businesses that only provide goods or services that are subject to one single VAT rate, issuing a free voucher will in many cases not be qualified as issuing an SPV because at the time of issue of that voucher, the VAT due on the underlying supply cannot be ascertained because that depends not only on the applicable VAT rate but also on the taxable amount. If goods are given away free of charge, the taxable amount is ‘the purchase price of the goods or of similar goods or, in the absence of a purchase price, the cost price, determined at the time when the application, disposal or retention takes place’.2 If services are given away for free, the taxable amount is ‘the full cost to the taxable person of providing the services’ in case of services.3 I refer to Section 6.5 for an elaboration on how to determine the taxable amount for free supplies. Where a face value voucher can be redeemed for different goods or services, even where these services have the same advertised value, the taxable amount for the underlying transaction cannot be determined at the time of issue of the voucher, and therefore the voucher cannot be an SPV.