As of 1 January 2019, the new provisions stated in the EU Directive No. 2016/1065 ("Directive") entered into force in the EU Member States.
The new rules, introducing specific provisions in relation to the issue, transfer and redemption of “vouchers”, are aimed at eliminating treatment mismatch among EU Member States which could trigger double taxation or non-taxation scenarios.
The new rules are only applicable to vouchers issued after 31 December 2018.
Based on the VAT Directive new provisions, vouchers are defined as an instrument where there is an obligation to accept it as a consideration or part consideration for a supply of goods or services to be supplied or the identities of their potential suppliers are either indicated on the instrument itself or in related documentation, including the terms and conditions of use of such instrument. Vouchers may have either physical or electronic form.
According to the explanations of the Directive, payment instruments and discount vouchers are not included in the scope of the new voucher definition nor do transport tickets, admission tickets to cinema and museums, postage stamps or similar.
Vouchers within the meaning of the new definition are classified within two different categories for the purpose of VAT: single-purpose voucher and multi-purpose voucher.
A single-purpose voucher is a voucher for which the VAT regime (place of supply and amount of VAT due) applying to the underlying supply of the goods or services redeemable through the voucher is already known when the voucher is issued.
Each transfer of a single voucher by a taxable person (including the issuing) is regarded as being the actual supply of goods or services to which the voucher relates. Consequently, the delivery of goods or supply of services in return for the accepted voucher is not a taxable transaction by itself in case the goods or services are provided by the issuer of the voucher (it has in fact already been subject to VAT at the moment the voucher was issued). But if the goods or services are provided to the voucher’s holder by another taxable person than the issuer, the supplier of the goods or services is deemed to have provided this taxable delivery of goods or services to the issuer.
Multi-purpose vouchers are all other vouchers corresponding to the definition of a voucher but for which the VAT regime is unknown (for example, a voucher accepted as consideration for restaurant service - that are taxable at the place where the service is provided - that could, according to the related documentation, be accepted as consideration in more than one EU country). The transfer of a multi-purpose voucher is not a taxable transaction by itself except for a supply of services that can be identified such as a distribution or promotion service. Only the actual supply of goods or services provided in respect to a multi-purpose voucher is taxable and the taxable amount is equal to the consideration paid for the voucher or, in the absence of information on that consideration, the monetary value indicated on the multi-purpose voucher or in the related documentation.
The practical changes these new rules may trigger in each EU Member states depend much on:
- How different these new rules are compared to those that used to apply to vouchers until 31 December 2018 in the different EU countries;
- The detailed comments that have been (or are to be) published by the tax authorities of the different Member states.