EU harmonisation of voucher taxation

The EU issued a draft amendment to the Voucher Directive as early as in 2012. It generated a lot of discussion, as the rules applied throughout the EU vary significantly. It has thus taken more than four years for the final wording of the directive to be adopted. The new rules will be in effect from 1 January 2019; and member states should implement them into their legislation by the end of 2018.

The new regulation exclusively governs vouchers for the delivery of goods or the provision of services and excludes discount vouchers. Moreover, it will not affect VAT treatment rules applicable to bus/train tickets, air tickets, cinema tickets, etc.

The directive defines a voucher as an instrument containing in itself an obligation to accept the voucher as partial or full consideration for the delivery of goods or the provision of services. It should be clear from a voucher or related documentation what goods or services one may acquire. The voucher (or the related documentation) should also specify the identity of the potential suppliers. The directive also distinguishes between single-purpose and multi-purpose vouchers and determines rules for their taxation.

A single-purpose voucher is defined as a voucher where the place of supply (i.e. delivery of goods or the provision of services) and the amount of VAT are known at the moment of its issuance (e.g. a voucher for dinner at a restaurant). A multi-purpose voucher is defined negatively as a voucher that does not have a single purpose (e.g. a voucher to a shopping mall where the VAT rate on goods or services is unclear beforehand).

Each individual transfer of a single-purpose voucher is considered a separate delivery of goods or a separate provision of services. In contrast, the transfer of a multi-purpose voucher itself is not regarded as a delivery of goods or a provision of services; a supply is deemed effected only once certain goods or services are acquired in exchange for the voucher.

The new rules should apply to vouchers issued after 1 January 2019. The Czech Republic is responding to the changes in the treatment of vouchers with an amendment to the VAT Act (in effect from 1 January 2017) currently in preparation, also taking into account the EU Court of Justice’s case law. According to this amendment, the duty to declare VAT on consideration received before effecting a taxable supply will arise once (i) the goods or services constituting the supply, (ii) the applicable VAT rate and (iii) the place of the future supply are known. This definition should thus correspond to the definitions and rules for the taxation of single-purpose vouchers embedded in the EU directive.