Benefit cards considered vouchers under VAT Act
At the Coordination Committee’s meeting, the Chamber of Tax Advisors agreed with the General Financial Directorate (GFD) on the VAT treatment of benefit cards. Benefit cards enable their holders to acquire pre-defined benefits from pre-defined benefit providers; however, the specific benefit and its provider is selected by card holders themselves.
In most cases, benefit cards represent non-monetary components of remuneration paid to employees who, after submitting their cards, may, e.g., enter selected sports centres.
The chamber’s representatives chose three model situations for assessment:
- benefit cards intended for one type of benefit
- benefit cards serving as a payment tool
- benefit cards giving the holder the right to draw benefits from individual providers.
The GFD agreed with the Chamber of Tax Advisors and decided to consider benefit cards vouchers pursuant to Section 15 of the VAT Act, even if no paper form is involved.
Where only one type of benefit can be obtained, it is a single-purpose voucher. Where various benefits can be drawn, it is a multi-purpose voucher. Simultaneously, the handing over of a benefit card to the holder, and the payment for the card by the card payer do not constitute a financial service.
We draw attention to the fact that the Coordination Committee did not discuss VAT on fuel or payment cards. Hence, we do not comment on the recent CJEU C-235/18 (Vega International) judgment.