Coupons and vouchers from the view of VAT
Companies often use different coupons and vouchers where the customer can purchase goods in advance and can pay later after the goods or the services have been delivered or provided, respectively. From the view of VAT, the payment of a coupon or voucher via credit card is a payment, which is provided in advance.
Neither the EU guideline about VAT nor the law about VAT on the vouchers’ taxation has been modified yet. At the end of this year, the amendment of the EU guideline was confirmed, which should be valid in the year 2017, and the basic rules may translate into an amendment of the Czech law about VAT on advance payments.
The obligation to declare VAT on the supply of goods or services arises on the day of the chargeable event. Should the payment be submitted before the day of the chargeable event, it develops an obligation to declare the tax to the day of submission of this payment.
In the case of submitting the payment in advance, the tax obligation does not incur automatically each time. There are exemptions for the payments that are “not sufficiently well known” on the day of their submission. The forthcoming amendment of the law says exactly, when the purposes will be “sufficiently well known” with regards to the VAT. At the time of submission, this data should be known about the advance payment:
- goods that should be delivered or the service which should be provided
- tax rate
- place of performance
It follows from the above that different vouchers exist in the context with the possibility of assessing the performance at the time of purchase, some of which will be taxed immediately during their sale and others during the redemption of the goods or services.
The “single-purpose” voucher entitles its holder to the redemption of the marked goods or services and the site of the VAT can be determined. If the distributor and the member state of delivery will be known, we can determine the place of the performance. Such a voucher introduces the taxation during its sale. Some examples are: vouchers for accommodation in a specific hotel, for purchasing fuel, providing of specific massage, etc. The “dual-purpose” voucher entitles its holder to the redemption of the goods or services of their choice. The performance is not sufficiently well known on the day of submitting the consideration. The taxation will be postponed to the date of the delivery of the goods or services providing the correct VAT rate.
The fact that taxed coupons, discount coupons, vouchers and other payment instruments is so unclear is evidenced by the extensive amendment of the EU guideline regarding VAT, which is trying to implement a unified process among the EU states and prevent any abuse of the law in the VAT area.
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