9.10 Summary

Under the current EU VAT rules, a distinction exists between ‘vouchers’ as defined in Article 30a(1) of the EU VAT Directive and transactions involving other instruments that, in practice, can also be referred to as ‘vouchers’ but are not covered by the EU VAT definition. The EU VAT rules distinguish two types of ‘vouchers’: single-purpose vouchers (SPVs), where the place of supply of the goods or services to which the voucher relates, and the VAT due on those goods or services, are known at the time of issue of the voucher, and multi-purpose vouchers (MPVs), meaning a voucher other than an SPV.

Each transfer of an SPV made by a taxable person acting in his own name shall be regarded as a supply of the goods or services to which the SPV relates. The actual handing over of the goods or the actual provision of the services in return for an SPV accepted as consideration or part consideration by the supplier shall not be regarded as an independent transaction.

The actual handing over of the goods or the actual provision of the services in return for an MPV accepted as consideration or part consideration by the supplier shall be subject to VAT, whereas each preceding transfer of that MPV shall not be subject to VAT.

These rules, that came into force on 1 January 2019, were intended to harmonise the way voucher transactions are taxed within the EU. However, as I demonstrated in this Chapter, these new rules did not solve all existing issues surrounding the VAT treatment of voucher transactions, but they created some new issues as well. In this Chapter, I have described tax technical issues as well as practical issues that are the result of the application of the EU VAT treatment under the current rules.

The VAT treatment of vouchers that are not covered by the EU VAT definition of ‘voucher’ are determined by the other relevant (general) provisions in the EU VAT Directive as well as CJEU case law.

Because in economic and commercial reality, vouchers are not the object or aim of a transaction, under desired and appropriate law, the supply and the issuing of vouchers should not be subject to VAT (contrary to current EU VAT rules and regulations). However, these transactions should be considered economic activities entitling the supplier or issuer of the vouchers to deduct VAT on the costs relating to the supply or issuing of the vouchers, provided that the relevant requirements for deduction are met.

Vouchers embody proof that the holder of the voucher is entitled to something: a supply of goods, services or a discount to a transaction, usually because the voucher also proves that payment was already received for those future transactions. The taxable amount for the underlying transaction should be the amount actually received by the supplier of the goods or services for which the voucher is redeemed. It can be difficult to establish what this amount is if other considerations, for example for the distribution of vouchers or for being allowed to be part of a specific voucher scheme, are settled with the consideration for the supply of goods or services for which the voucher is used.

The distribution of vouchers is often not specifically agreed between parties as being a service performed for consideration. However, it should be treated as such in cases where economic reality dictates so.

Transactions regarding vouchers, not being the supply and issuing of vouchers, are not VAT exempt.