Vouchers: effects on VAT

Single- and multiple-use vouchers

In the context of VAT, a voucher is an instrument that can be exchanged for goods or services. A distinction is made between two types of vouchers: the single-use, and the multiple-use voucher. With a single-use voucher the due VAT and the place of supply is already known at the time of issue. The VAT is therefore immediately due upon issue. The moment the voucher is redeemed by the consumer, no more VAT is due. In contrast, with a multiple-use voucher the place of supply and/or the amount of VAT due is not yet known at the time it is issued. No VAT is therefore due immediately, but it is due at the time of exchange instead. When such vouchers are not redeemed, you do not owe VAT.

When your business does not give out refunds upon cancellation, you may issue a voucher that provides your client with the right to the goods of services already paid for. This is currently happening frequently in the travel industry. When an extra payment is not needed once the voucher is redeemed, you will have to determine whether it concerns a single-use or a multiple-use voucher, and the aforementioned consequences for VAT apply.

Many entrepreneurs currently issue vouchers with a discount in order to generate cash flow during this difficult period. For example, vouchers are offered at clothing stores and awarded with a value of € 100, for which only € 75 needs to be paid by the client. In such cases, a determination on whether these vouchers are single- or multiple-use is necessary in order to understand the impact on your VAT declaration.

Discount coupon

In VAT terms, a voucher that can only be redeemed with an additional payment is not treated as a voucher, but rather as a discount coupon. In this case, VAT is due upon issue of the voucher. When the coupon is exchanged, VAT is due only on the extra payment.

Do you offer vouchers to your clients? We recommend that you look closely at the consequences this has for your VAT. Every situation can have a different effect on your VAT. We’d like to think along with you in these challenging times.

Want to know more?

For more information, please contact your Mazars contact person. They can provide support in submitting applications or put you in touch with one of our specialists. We are happy to assist you.