EU to relaunch voucher VAT proposal

Fri 20th May 2016

The EU Dutch presidency of the EU Council of Europe is expected to put forward revised proposal for the treatment of VAT on vouchers by June.

The EU had drafted an amendment to EU VAT Directive to cover VAT on vouchers in 2012. However, there was a split between member states.

VAT on vouchers

The current Directive does not cover the VAT treatment of vouchers where they are used as consideration for a taxable supply. Member states have developed a range of conflicting treatments covering issues around the place of supply, the taxable amount and the rules on cross-border use of vouchers. The issue of vouchers on chain supplies, and their sale by intermediaries, is particularly uncertain.

In addition, the member states cannot agree on the right of providers of multi purpose vouchers to deduct their input VAT. Over half the member states believe such vouchers are outside the scope of VAT and should therefore not enjoy the right to deduct VAT on expenses or overheads.