The EU VAT Treatment of Vouchers (FM nr. 157) 2019/10.1:10.1 Purpose of the research and research questions

The EU VAT Treatment of Vouchers (FM nr. 157) 2019/10.1

10.1 Purpose of the research and research questions

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The purpose of this research is examining the VAT treatment of voucher transactions in the context of promotional activities within the framework of the EU VAT rules, CJEU case law as well as desired or appropriate law, where this deviates from positive law. As demonstrated, voucher transactions deserve a specific focus because the VAT treatment of transactions involving vouchers has proven very obstinate. Current rules and case law are in my view still not best suited to provide for the appropriate VAT treatment of these transactions. This research is aimed at answering how voucher transactions in the context of promotional activities should be treated from an EU VAT perspective.

To get to the answer of my main question, what is the appropriate VAT treatment of vouchers in the context of promotional activities, a number of sequential steps needed to be taken. These steps were intended to get answers to a number of questions that are necessary to see and understand the full ‘landscape’ that is covered by my main question. Vouchers are used for so many different shapes and forms of promotional activities, that the following separate elements, or questions, needed to be researched and answered:

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How to determine whether a supply is made free of charge? (discussed in Section 3)

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How to determine whether a supply that is part of a composite supply (or: an element in a composite supply) that – as a whole – is made for consideration, is made free of charge? (discussed in Section 4)

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What should be the VAT treatment of discounts or rebates granted to other persons than the actual recipient of the original transaction? (discussed in Section 5)

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Which free supplies are and should be taxed and how can this be best achieved? And what should be the taxable basis or taxable amount for free supplies? (discussed in Section 6)

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What should be the taxable amount or taxable basis for barter transactions? (discussed in Section 7)

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Can the VAT on costs incurred for performing promotional activities always be fully deducted? Should it always be deductible? (included in Sections 6 and 8)

The answers to all the above questions should lead to the answer to the main question of this research:

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How should transactions involving vouchers be treated from an EU VAT perspective? (Section 9)

In this research I have answered these questions, applying positive EU law and case law and testing this against the purpose of EU VAT, being a tax on expenditure for local private consumption, as well as the economic and commercial reality of the relevant transactions. In this last Chapter, I will answer all these questions and, where relevant, I will provide recommendations.

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