The European Commission has compiled a report on the results of the public consultation entitled "Modernising the Value Added Tax treatment of Vouchers and related issues". The Report is now available in .pdf format. The responses are available upon request. See our contact page.
In November 2006 the Commission's Taxation and Customs Union Directorate-General made available on its website a consultation paper seeking views from the public and business. It described the inconsistencies in the VAT treatment of vouchers between Member States. It explained that these inconsistencies may offer opportunities for tax avoidance or may raise situations of double, or non-taxation (for cross-border transactions).
After a description of several kinds of vouchers the consultation paper analysed some possible options for their VAT treatment taking into account such fundamental elements as the place and the time of supply and the taxable amount. Also the dividing line between vouchers and means of payment was analysed in order to avoid unwelcome distortions.
Finally a section dedicated to the European Court of Justice case-law was included to clarify the status quo of the interpretation of the current legal framework as set out in the Sixth VAT Directive (Directive 77/388/EEC, now Directive 2006/112/EC).
The paper was addressed to stakeholders such as companies who issue or deal in vouchers of all kinds, and of businesses operating or using payment systems as well as their advisors.
The purposes of consulting the public on this issue were:
More than 30 responses were received from companies and associations in several different Member States.
Unfortunately, the technical complexity of this sector is not conducive to a comprehensive summing up of the outcome but in brief:
All of them very much welcomed the initiative of the Commission arguing that:
Finally any change in the VAT treatment should take into account the time needed by business for the adaptation of systems. A transitional period between the publication of the law and its entry into force is considered as ideal.