EU VAT on vouchers agreement

Sun 3rd Jul 2016

The EU has adopted an agreement on the VAT treatment of vouchers which will come into place across all member states by 1 January 2019 or sooner.

The new directive covers:

  • the definition of vouchers, including: retailer gift cards; price discount coupons; and pre-paid voice and data telephony cards.
  • the different treatments of single and multiple use vouchers, and the place of supply. It seeks to avoid double taxation where vouchers are used across countries with varying VAT rules – termed mismatches.
  • how to determine the taxable base of vouchers to calculate the VAT due.
  • It does not cover discount vouchers which allow for a price reduction, but carry no right to receive goods or services

All member states will transpose the new rules into their local VAT legislation by 31 December 2018