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EU VAT on voucher reforms January 2019

From 1 January 2019, the 27 member states of the EU adopted harmonised rules on the VAT treatment of single-use and multi-use retail vouchers. These reforms are enacted by the VAT COUNCIL DIRECTIVE amending Directive 2006/112/EC as regards the treatment of vouchers

A voucher is a instrument used as consideration or payment for the supply of goods or services. For VAT purposes, the EU as defined vouchers into two models. Follow all the European Union’s completed and planned reforms via VAT Calc’s EU VAT reform tracker.

1 Single Use Voucher

These are vouchers where the shop or provider where the voucher may be redeemed is set and the goods or services and country of use are known (so VAT rate clear) at the time of buying the voucher.  For example, a voucher issued by a single national chain may typically only be used in shops of that chain. So it is defined at the time of buying the voucher who the supplier will be. This is therefore deemed supply. Any VAT due on those underlying goods or services is paid at the point of issue of the voucher and at the point of each transfer of it, where these are done for consideration

2 Multi-purpose voucher

These are vouchers where the goods or services, shop, provider or jurisdiction where the voucher may be redeemed is not set at the time of buying the voucher.  Typically, this is a scheme with a number of differing retailers signed-up, and the consumer may redeem the voucher in any one of the stores for products or services that may have different VAT rates. So it is not clear who the supplier will be or what VAT rate at the time of buying the voucher. Any VAT due is only payable when the voucher is redeemed for goods or services. The consideration for that supply will be amount last paid for the voucher or, in the absence of this information, its face value.

The new EU rules cover:

  • The rules will exclude discount vouchers, transport tickets, admission tickets and postage stamps.
  • 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

EU VAT reforms

Reform (click for details) Update
2025 VAT registration thresholds equivalence foreign businesses On track
Virtual events VAT rule changes Agreed
2024 Payment providers' seller transaction reporting and bookkeeping obligations On track
Digital Reporting Requirements including EU e-invoicing harmonisation Implementation of VAT in the Digital Age?
2023 DAC 7 - marketplace reporting harmonisation On track
Financial Services VAT exemption reform proposals Consultation complete; proposal 2023
Tour operator margin scheme VAT reforms EC undertaking fresh review
2022 IOSS reforms to prevent double taxation Proposals early 2022
EU reduced VAT rate freedoms Enter into force 6 April 2022
VAT in the Digital Age proposals On track for 7 Dec 2022 publication
Single VAT Registration in the EU - extension of OSS On track for 7 Dec 2022 publication
Proposal for VAT treatment of the platform economy On track for 7 Dec 2022 publication
EU DAC8 cryptocurrency tax reporting proposals On track for 7 Dec 2022 publication
VAT Gap Initiative Q3 2022
EU definitive VAT system On hold
2021 One-Stop-Shop (OSS) single EU VAT return In effect since 1 July 2021
Ending €22 import VAT exemption; new IOSS return In effect since 1 July 2021
Marketplace deemed supplier EU VAT reforms In effect since 1 July 2021
2020 EU four Quick Fixes for VAT In effect
Tax authorities anti-VAT fraud cooperation In effect
Tax Action Plan - 25 VAT and other tax reforms roadmap See 'VAT in the Digital Age' and others
2019 Simplification of e-services VAT compliance and thresholds In effect
Single and multi-use vouchers In effect
2018 Lower e-book and publications VAT rates In effect, although not all EU states have adopted the option
EU Generalised Domestic Reverse Charge VAT Mechanism In effect, although no country has adopted this voluntary option
2015 B2C electronic services VAT reforms - MOSS return In effect

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