From 1 January 2019, new regulations will apply to the VAT treatment of vouchers in accordance with the EU Voucher Directive. A distinction is then made between 2 different vouchers, the single-purpose and the multi-purpose coupon. But what is actually new? And how do the two types differ from each other? Find out now.
Antonia Klatt
Last Updated on 28 October 2019
So, what’s new now?
So far, the issue of vouchers for the later purchase of goods or unspecified services has not been a taxable process. Coupons were recorded separately in the checkout system. Because of the introduction of the EU Directive, a distinction will be made between single-purpose and multi-purpose vouchers, effective 1.1.2019. Both have different sales tax consequences.
1. The single-purpose voucher
According to the intended definition, a single-purpose voucher is characterised by having the tax rate and the place of delivery of the goods fixed at the time of delivery. A voucher that does not do so is a multi-purpose coupon.
The main difference between the two types of voucher is therefore the time of taxation:
In the case of a single-purpose voucher, sales tax is payable immediately upon sale of the voucher, whereas in the case of a multi-purpose voucher it is due upon use.
Definition:
A “single-purpose voucher” is one in which the place of supply to which the voucher relates, and the VAT owed are determined when the coupon is issued.
Tax liability:
In the case of single-purpose coupon, VAT is charged at the time the vouchers are sold.
2. The multi-purpose voucher
In the case of vouchers that do not fall into the “single-purpose voucher” category, the value-added tax is only paid when the service is performed (voucher is redeemed). Vouchers that entitle the holder to receive services in different countries (with different service locations) are also multi-purpose vouchers.
Definition:
A “multi-purpose voucher” is any coupon that is not a “single-purpose voucher”. That’s as simple as it is.
Tax liability:
In the case of a multi-purpose coupons, VAT will be charged at the time at which the goods or services to which the voucher relates are supplied. VAT is not payable until the coupon is redeemed.
