9.7.5 VAT rate changes – planning

The last example of a practical reason why issuing SPVs should not be treated as the supply of the underlying transaction is the possible planning opportunity that this creates.

In case of changes in VAT rates, selling an SPV could provide for a planning opportunity. Making prepayments (in the sense of Article 65 of the EU VAT Directive) before a VAT rate increase becomes effective, usually does not work because under the relevant VAT rules, Member States may effect adjustments in order to take account of the rate applying at the time when the goods or services were supplied.1 An example of such measures is a Member State requiring payment of the additional VAT amount (i.e. the difference between the VAT amount already paid upon receipt of the prepayment and the VAT amount due at the time of the actual supply) in the first VAT return of the taxable period in which the VAT rate increase has become effective. This adjustment system cannot be applied where a business would sell an SPV (from 1 January 2019) instead of charging a prepayment, because the transfer of an SPV shall be regarded as a supply of the goods or services to which the voucher relates.2 This means that the actual supply is deemed to have taken place before the VAT increase. In my view, the EU VAT Directive should have been adjusted to avoid this unwanted side-effect, or rather, the transfer of an SPV should not be treated as the supply of the goods or services to which the voucher relates.

Based on the above, I come to the conclusion that issuing or supplying a voucher in itself is not the object or purpose of a transaction and that, under appropriate law, the issue or transfer of a voucher as such should not be subject to VAT.