On June 27, 2016 the Council of the European Union adopted a directive to amend the EU VAT Directive. This amendment is intended to harmonize the VAT treatment of vouchers in the EU. Currently, vouchers are treated differently throughout the EU. As this new legislation could have an impact on your EU-wide business, we would like to inform you about the changes and possible opportunities and/or threats.
- Under the current legislation, the VAT treatment of vouchers differs in each EU Member State (e.g. ‘single-purpose vouchers’ (“SPVs”) and ‘multi-purpose vouchers’ ( “MPVs”)).
- The concepts and respective VAT treatment of SPVs and MPVs will be harmonized by defining them in the EU VAT Directive.
- The new EU-wide harmonized definitions of SPVs and MPVs means that the VAT treatment of vouchers will change in certain EU Member States.
- For example: vouchers that are currently not subject to VAT (since they are regarded locally as an MPV) may become subject to VAT (regarded as an SPV) after the legislation has been amended and vice versa.
- Current non-taxable/VAT-exempt services relating to the distribution or exchange of vouchers would be regarded as a VAT-taxed distribution service under the new legislation.
We believe that the amendment of the EU VAT Directive will raise many questions, since the new definitions will still lead to different interpretations. As far as we can see at this moment, the amendment will not impact the VAT treatment of ‘discount vouchers’.
The amended EU VAT Directive must be implemented in national legislation as of January 1, 2019 and will affect vouchers issued after December 31, 2018. The treatment of vouchers issued between now and December 31, 2018 will depend on national VAT policy and rules. Considering the potential impact, we recommend reviewing the voucher supply chain in order to ensure that optimal use is made of the current legislation and no (substantial) VAT risks and/or leakages exist in your business.
In addition, we recommend performing an impact analysis quick scan of the effects of the amendment of the EU VAT Directive on your business, to identify possible opportunities and/or risks. Meijburg & Co would be more than happy to assist you with an impact analysis or the structuring/restructuring of your voucher supply chain. For more information regarding the amended legislation and the impact analysis, please contact one of the advisors listed at the right or your regular Meijburg & Co VAT contact.