Vouchers form the VAT perspective from 1 January 2019

Further to the information presented in the previous issue of our Newsletter, we would advise you that the currently prepared amendment to the Czech VAT Act, which is to come into effect from 1 January 2019, has included the wording of the Council Directive (EU) No 2016/1065 (the “Directive”), which regulates the treatment of vouchers from the VAT perspective with the aim of ensuring identical treatment of vouchers in all EU Member States to avoid any undesirable consequences in the single market.

The new rules should only be applied to vouchers that may be used as the consideration to be paid for the supply of goods or services, should not cause any changes in the VAT regime concerning travel and airfare, admission tickets to the cinemas, museums, postal stamps or similar documents. These rules should not further apply to the discount upon purchase of goods and services unless such a voucher grants the right to receive the goods or services.

The Directive newly distinguishes between single-purpose and multiple-purpose vouchers.

The single-purpose voucher is 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. At the time of exchange of the voucher for the relevant goods and services, such transaction shall not be subject to tax. A single-purpose voucher may be, for instance, a voucher to a specific shop where only goods that are subject to a single tax rate may be purchased.

On the other hand, a multi-purpose voucher means any voucher that is not a single-purpose voucher. Such a voucher may include, for instance, a voucher to a shopping mall which can be exchanged for goods purchased in various shops and where it is not evident at the transfer of the voucher to which VAT rate the supply of goods or services will be subject. In case of a multi-purpose voucher, the taxable supply, i.e. the supply of the goods or services, shall only occur at the time when the voucher will be used (upon purchase of the relevant goods or services).

If your company issues vouchers, we recommend a thorough review of their individual types and checking whether the VAT regime applying to such vouchers complies with the new legislation.

Zuzana Studničková
Senior Tax Consultant

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