France VAT unused vouchers

Fri 3rd Jun 2016

The French Council of State has endorsed the view that VAT is due on unused vouchers for B2C supplies. This backs a European Court of Justice ruling that VAT was due on Air France vouchers.

The case concerned sales of cinema vouchers which entitled consumers to future cinema viewings. The cinema chain argued that no VAT was due on the non-refundable, unused tickets as the price paid represented compensation for the loss of the cinema for the customer not using the service. However, the Council found that it was for the provision of the cinema service, and therefore a taxable supply. This was notwithstanding that the cinema-goer did not consume the services.