The EU VAT Treatment of Vouchers (FM nr. 157) 2019/5.2:5.2 Conditional and unconditional discounts and rebates

The EU VAT Treatment of Vouchers (FM nr. 157) 2019/5.2

5.2 Conditional and unconditional discounts and rebates

Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.

A discount or rebate can be unconditional or conditional. Unconditional discounts are discounts offered without the customers that benefit from the discount have to meet certain conditions, e.g. a certain percentage off the price of a specific good. Conditional discounts can be divided into three categories of conditions:

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conditions that cannot be influenced by customers,

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conditions that need to be met by the customers, and

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conditions that require the customer to actually do something in return for the discount.

Examples of the first type of discounts are discounts where a discount, e.g. a percentage off the price, is determined by the outside temperature or the age of the customer, or discounts that only apply for a very limited amount of time (the condition being that the transaction is concluded within that time).

Examples of the second type of discounts are prompt payment discounts, volume discounts but also the examples I use in Chapter 7, e.g. a discount off the price of a pan at a certain retail chain if customers hand in an(y) old pan, or a discount granted to all children handing in a finished colouring picture or all customers that hand in a correctly solved puzzle.1 In my view, having to hand in a fee money off coupon in return for a discount also qualifies as a conditional discount.

An example of the third type of discount is successfully organising a party where products are sold in return for a discount off the price of one of the offered products. As I explain in Chapter 7, from a VAT perspective, this is not really a discount but a (taxable) barter transaction where the amount of the discount is considered to represent the value of the consideration for a service, i.e. organising a successful sales party. Since I discuss the VAT treatment of barter transactions in Chapter 7, I will not discuss these types of promotional activities in this Chapter.

Coupons and other types of vouchers are often used to demonstrate the right to a discount or rebate. I will discuss the VAT specifics of vouchers in Chapter 9. In this Chapter, I will discuss the basic VAT mechanics of discounts and rebates.

Deze functie is alleen te gebruiken als je bent ingelogd.