After four years of talks, Directive 2016/1065 was adopted by the Council of the European Union in June 2016. The Directive provides for VAT rules on vouchers and aims to unify and harmonise the rules so that double taxation or non-taxation of transactions realized with vouchers within different EU member states is avoided. This Directive in fact amends Directive 2006/112/EC, as concerns the use of vouchers.

The Directive is concerned only with vouchers on goods and services and does not provide any rules for VAT on tickets, entrance tickets etc.

The Directive defines voucher as “an instrument where there is an obligation to accept it as consideration or part consideration for a supply of goods or services and where the 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”.

For taxation of vouchers it is essential to distinguish between a “single-purpose voucher” which means “a voucher where the place of supply of the goods or services to which the voucher relates, and the VAT due on those goods or services, are known at the time of issue of the voucher” (meaning that the taxpayer has at the moment of issue of the voucher sufficient information to account for the VAT). The moment of handover of such voucher to the customer in exchange for consideration is when the chargeable event occurs. The following exchange of the voucher for delivered goods or provided services will not be relevant for the VAT. Transfer for consideration of a single-purpose voucher between taxable persons will be viewed as an individual chargeable event. With multi-purpose vouchers, the VAT will be payed upon redemption of the voucher. That is because only upon redemption of the voucher will it be clear what specific goods or services has it been exchanged for and the taxpayer will be able to account for the VAT.

Although the new  Directive must be implemented into state internal laws on VAT before the end of 2018 and take effect 1^st January 2019, the home government has been quicker in this case than the Council and a similar provision will be implemented into the internal law with the amendment momentarily under consideration, which should come into effect 1^st April 2017 with the new version of § 21 parag. 1, which should be included in separate section 20a. Here is a quote of the proposed new version:

“The rise of the obligation to submit a VAT report upon delivery of goods and supply of services

• The obligation to submit a VAT report arising upon delivery of goods and supply of services arises on the day of the chargeable event.
• If prior to the chargeable event a consideration is accepted, the obligation to submit a VAT report on the amount received arises on the day the consideration is accepted. This doesn’t apply in such cases where the taxable transaction is not sufficiently known on the day of the chargeable event.
• Delivery of goods or supply of services is sufficiently known for the purposes of this Act when at least this information is known:
  1. The goods which should be delivered or the service which should be supplied,
  2. The tax rate in case of a taxable transaction,
  3. The place of the taxable transaction.”

According  to the explanatory memorandum for this amendment to Act on VAT, with vouchers intended for a specific transaction known beforehand (single-purpose vouchers) the VAT will be applied on their handover to the customer or on every following sale or transfer, just like the Directive provides.

With vouchers where the taxable transaction is unknown beforehand (for example shopping mall vouchers which can be used on a wide range of products that can have different VAT rates), the money accepted upon the handover, sale or transfer of the voucher won’t be subject to VAT. It is the redemption of vouchers for goods or services that is relevant for the VAT. According to the explanatory memorandum this concerns for example vouchers of mobile telephony providers which allow one to use various services of other operators together with services provided by third parties (application payments, donation text messages, ticket fares etc.).