EU VAT on vouchers agreement

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