VAT treatment of single-purpose vouchers (SPV) and multi-purpose vouchers (MPV)
Vouchers are categorized into two groups for the purpose of VAT:
Before going into more detail on this categorization, it’s important to keep in mind which entities are NOT considered to be vouchers according to the Council Directive (EU) 2016/1065 of 27 June 2016:
Transport tickets, admission tickets to cinemas or museums and postage stamps or similar are not considered to be vouchers. Discount instruments that entitle the holder to a discount upon the purchase of goods or services but carry no right to receive such goods or services are not considered vouchers for the purposes of the new rules. These are not the same as Discounted Vouchers. Payment instruments are not considered to be vouchers as there is no entitlement attached to them and there is no obligation to accept them as consideration for the supply of a good or a service.
Single-Purpose Vouchers (SPV)
A Single-Purpose Voucher (SPV) is a voucher issued on or after 1 January 2019, for which the following details are known at the time of issuance:
- the place of supply of the goods or the services to which the voucher relates.
- the VAT due on those goods or services.
The issuance of an SPV is subject to VAT at the applicable rate for the underlying goods or services. VAT is due in the period when the voucher is purchased. If the SPV is not redeemed or is only partially redeemed, no adjustment can be made for the non-redemption. VAT remains applicable regardless of whether the voucher is redeemed in full or in part.
To simplify, consider a scenario in which the voucher is sold and redeemed in the same country, where the applicable VAT rate(s) are known and defined. In this case, both the VAT on the voucher and the VAT on the underlying goods or services are known at the time of issuance. This means the supply and the applicable VAT rate are determined at the time the SPV is issued, regardless of whether the voucher is redeemed in full or partially.
When an SPV is redeemed by the customer, either fully or partially, to purchase goods or services, the supply of the goods or services is not subject to VAT. This is because the VAT has already been accounted for at the time the voucher was issued. As a result, the transaction is not considered an independent supply, and the supplier is not required to account for VAT on the goods or services provided. However, the supplier retains the right to deduct input VAT on their costs, following standard VAT deductibility rules. If the customer pays additional amounts for supplies or considerations subject to VAT, VAT will be charged on those amounts.
To create a single-purpose voucher, refer to the instructions.
Multi-Purpose Vouchers (MPV)
Any voucher issued on or after 1 January 2019 that does not meet the criteria for a Single-Purpose Voucher (SPV) is classified as a Multi-Purpose Voucher (MPV) for VAT purposes.
MPVs can be used to acquire a variety of goods and services that may be subject to different VAT rates and have different places of supply. A voucher is considered a multi-purpose voucher if either the underlying supply or the VAT due is not known at the time of issuance.
For example, if a voucher is issued in one country but redeemed in another country (the country of supply), and the applicable VAT rate was not known at the time of issuance, the VAT rate cannot be determined when the voucher is sold. In this case, the voucher is classified as an MPV.
The simpler rule is that any voucher that is not a SPV is treated as an MPV.
VAT is only due when an MPV is redeemed to obtain the underlying goods or services. At this point, the provision of the goods or services in exchange for the MPV constitutes a supply for VAT purposes. The supplier of the goods or services is responsible for accounting for VAT when the MPV is redeemed.
To create a Multi-Purpose voucher, refer to the instructions