9.5.2.7 The appropriate EU VAT treatment of transactions involving SPVs (summary)

As I mentioned in Section 9.5.2.3, the provision in Article 30b of the EU VAT Directive that dictates that each transfer of a single-purpose voucher made by a taxable person acting in his own name shall be regarded as a supply of the goods or services to which the voucher relates was probably included to avoid any discussions on the VAT treatment of breakage. I also held in that Section that even though this provision is tenable when tested against the EU VAT purpose of taxing expenditure on local private consumption, in my view, the economic and commercial reality of SPV transactions would be better reflected if payment for these SPVs was treated as ‘prepayments’ for VAT purposes.