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Tuesday, 12 July 2016

New EU Directive on VAT and vouchers

On 27 June 2016, the EU Council adopted a directive on transactions involving vouchers by harmonising national VAT rules in this area. The directive was adopted without discussion.

Vouchers are used increasingly and come in many forms. They include for instance pre-paid telecom cards, gift cards and price discount coupons for the purchase of goods or services.

The directive seeks to achieve legal certainty by reducing the risk of mismatches in national VAT rules that lead to double taxation, non-taxation or other undesired consequences, which can happen where a voucher is issued in one member state and used in another.

The new directive is a reduced version of the EU Commission’s initial proposal. The directive now settles general definitions that should apply for all EU member states.

The directive defines single-purpose vouchers and multi-purpose vouchers and sets rules for determining the taxable value of transactions in both cases.

The transfer by a taxable person acting in his or her own name of a single purpose voucher (i.e. a voucher where the place of supply of the goods or services to which the voucher relates, and the VAT due on those goods or services, are known at the time of issue of the voucher) will be assimilated into the underlying taxable supply of goods or services. VAT will, therefore, be chargeable upon prepayment provided that all relevant information is known.

By contrast, where a transfer of a single-purpose voucher is made by a taxable person acting in the name of another taxable person, then that transfer will be regarded as a supply of the goods or services to which the voucher relates made by the other taxable person in whose name the taxable person is acting.

The transfer by a taxable person acting in his or her own name of a multi-purpose voucher will not be considered subject to VAT until the actual goods or services will be handed in return for a multi-purpose voucher accepted as consideration or part consideration by the supplier. The taxable amount will be equal to the consideration paid for the multi-purpose voucher, or in the case of a lack of information, the monetary value indicated on the voucher or in the related documentation, less the amount of the VAT relating to the goods or services supplied. Where a multi-purpose voucher is used partially regarding the supply of goods or services, the taxable amount should be equal to the corresponding part of the consideration or the monetary value, less the amount of the VAT relating to the goods or services supplied.

The member states have until 31 December 2018 to transpose the directive into national law and regulation. Provisions will only apply to vouchers issued after that date.

In Belgium, the current practice is more or less in line with the principles explained in the new directive as the distinction between single and multi-purpose vouches is already applied. However, this new directive could have an impact on the current VAT treatment of certain specific voucher types in Belgium. Meal vouchers are currently considered as out of scope of VAT; it should be checked if this is still correct under the new rules. Also, it should be verified if the existing rules applied for prepaid telephone cards fully comply with this new directive.

The Belgian authorities have still some time to take the necessary action for implementing this new directive into law. Again, the VAT authorities will need to explain the practical impact in detailed guidelines.

Source: Council Directive (EU) 2016/1065 of 27 June 2016 amending Directive 2006/112/EC as regards the treatment of vouchers.

For more information about this topic, please contact our VAT team:
Stijn Vastmans - Partner (
Stein De Maeijer - Associate (
Gert Vranckx - Associate (
Loulou Geboers - Associate (

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