BDO Indirect Tax News

European Inion - France: CJEU rules on VAT treatment of single-purpose and multi-purpose vouchers

The Court of Justice of the European Union (CJEU) issued a decision on 18 April 2024 in which it clarifies the classification of vouchers as single-purpose vouchers (SPVs) or multi-purchase vouchers (MPVs) and provides some clarity on the VAT treatment applicable to the resale of MPVs sold through distributors or intermediaries in different EU member states.

The EU VAT Directive, as amended in 2019, introduced definitions of vouchers, confirmed that there is only one supply where vouchers are involved (i.e., a supply of the goods or services to which the voucher relates) and makes a distinction between SPVs and MPVs. A voucher is defined in article 30b of the directive as an instrument that fulfils the following conditions:
  • The voucher is sold by the issuer or a third party (intermediary, distributor, etc.);
  • The voucher includes an obligation for the supplier of goods or services to accept it as total or partial consideration for the supply of goods or services; and
  • The eligible supplies of goods or services are indicated on the voucher or in the related documentation, such as the general terms and conditions of use of the voucher.
A voucher is considered an SPV if the place of supply, the VAT payable and the taxable base of the relevant goods or services are known at the time the voucher is issued. Otherwise, the voucher is considered an MPV.

A voucher’s classification will determine the VAT treatment: an SPV is subject to VAT upon each sale (i.e., at the time of issuance and each subsequent transfer) and an MPV is subject to VAT when it is redeemed.
Facts of the case
The case before the CJEU involved the classification and liability for VAT of the marketing of prepaid cards or voucher codes used to purchase digital content in an online shop.

M-GbR is a German reseller of vouchers to final consumers who purchase vouchers from a UK issuer. During 2019, M-GbR marketed, via its online shop, prepaid cards or voucher codes enabling “user accounts” to be loaded for the purchase of digital content and that the consumers could use to purchase digital content (i.e., electronic services). The UK supplier marketed the vouchers throughout the EU with various country codes, some of which were “country-locked”—including the vouchers at issue in the case—in that the consumer could use the voucher exclusively in one country. Therefore, when M-GbR sold the vouchers to its customers, the customers could only use them in Germany. M-GbR took the position that the vouchers were MPVs so the transfers were not subject to VAT. The German tax authorities disagreed because the vouchers could only be used by German-resident consumers.
CJEU decision
The CJEU held that, since the vouchers could only be used in Germany, they had to be classified as SPVs, notwithstanding the uncertainty as to where the consumers were resident. Consequently, only German VAT was applicable. However, as the applicable VAT rate remained uncertain, the CJEU left this question to the referring court to classify the vouchers.

The court also discussed the supply of distribution or promotional services by the reseller of MPVs. In the context of distribution chain MPVs, a supply of promotional or distribution services that can be dissociated from the (re)sale of the vouchers will be subject to VAT under the general VAT rules.
The case highlights the intricacies of the VAT treatment of vouchers. Taxpayers involved in the distribution chain of vouchers should analyse and review the classification of their vouchers as SPVs or MPVs and assess the underlying terms of the vouchers to comply with the EU VAT applicable rules.

David Hirsch
BDO in France
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