9.5.2.4 The VAT treatment of redeeming SPVs that were issued for consideration

Insofar as an SPV is used for obtaining goods or services by the holder of the SPV, the actual handing over of the goods or the actual provision of the services shall not be regarded as an independent transaction under Article 30b(1) of the EU VAT Directive. Instead, where the issuer reimburses the business accepting the SPV for his actual supplies, these underlying goods or services are deemed to be supplied to the issuer of the SPV reimbursing the business accepting the SPV.

The above means that, for example, where a business would accept an SPV with a face value of 10 in return for a good with an advertised price of 15, and the remaining amount is paid in cash, the business making that actual supply is considered to make a supply of the good to the person physically receiving the good but only insofar as the good is paid in cash. If he is reimbursed by the issuer of the SPV, the good will be deemed to be (also) supplied to the issuer of the SPV, for the amount of the reimbursement. This means that even though there is only one ‘physical’ supply, from an EU VAT perspective, two supplies of goods were made to different recipients.