VAT rules for gift cards

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17 February 2020 - 11:50, by , in Digital gift card, No comments

The ultimative guide to EU VAT rules for gift cards

 

January 1st 2019

The European Commission has decided to adopt new rules on VAT treatment of gift cards across Member States.

First, the main rule has been to pay VAT when redeeming a gift card.
The distinction will now be made between the so-called ‘Single and Multi Purpose Vouchers’.


Single-Purpose Vouchers

Requirements:

• A gift card that only can be used in the country of purchase!

• The VAT rate is known at the time of purchase of the gift card.

 

Examples:

A gift card that are used in a detail store only in the country where it’s purchased, for example a x-type of store, were the VAT payable on the products in question is known at the time of issue of the gift card.

→ VAT on the issue of the gift card.

A gift card, that can be used in a clothing chain in your country, where the gift card can be used in all the chain’s stores around the country, but only in that country. The VAT is known at the time of issue the gift card.

→ VAT on the issue of the gift card.

A gift card that can be redeemed by a number of different restaurants and cafes, but only in your country. The VAT is known at the time of issue of the gift card.

VAT on the issue of the gift card.


Multi-Purpose Vouchers

Requirements:

• A gift card, which can be redeemed in several countries or can be used to buy both taxable and VAT-free product / services in your country.

 

Examples:

A gift card which can be used on a weekend stay in your country and other countries.

→ VAT on redemption of the gift card.

Gift cards for businesses that sell VAT-free as well as products / services subject to VAT. (VAT-free goods / services = Stamps, newspapers, health treatments, travel, etc.).

→ VAT on redemption of the gift card.

A gift card that can be used for an x-type of store chain from your country, but which has locations in countries other than only in yours.

→ VAT on redemption of the gift card.

Open gift cards, that for example can be redeemed for Single purpose gift cards with VAT-free products / services, for example it can be used on a trip etc. But where the VAT rate isn’t known.

→ VAT on redemption of the gift card.

Read more about our gift card company Huuray.

 


Sources:

https://www.gov.uk/government/publications/changes-to-the-vat-treatment-of-vouchers/vat-treatment-of-vouchers-from-1-january-2019


This article cannot be considered as exhaustive for all applicable gift card and gift card rules. 

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