Commission proposes new VAT rules for vouchers
Brussels, 10 May 2012 – Today, the European
Commission proposed to update EU VAT rules to ensure
the uniform tax treatment of all types of vouchers
across all Member States. Vouchers represent a
market of more than € 52 billion per year in the
European Union. Prepaid telecommunications account
for almost 70% of the voucher market, followed by
gift vouchers and discount vouchers. However,
differences in national VAT rules on vouchers lead
to serious market inefficiencies. Instead of being
able to really benefit from the Single Market,
companies face problems of double taxation and
difficulties in expanding their business across
borders. The new rules seek to redress this
situation.
Algirdas Šemeta, Commissioner for
Taxation, Customs, Anti-fraud and Audit, said:
"Vouchers are a booming business in Europe, with
millions bought and sold every week. There is no
justification for this ever-expanding market to be
held back because of uncertainty and complications
in the tax rules. With the new VAT rules proposed
today, we can move to a genuine single market for
vouchers, to the benefit of businesses, citizens and
tax administrations."
Under the proposed new rules, the different
categories of vouchers would be clearly defined,
along with their VAT treatment. This would enable
uniform treatment of transactions involving vouchers
across Europe. The proposal includes provisions on
defining vouchers for VAT purposes and identifying
when VAT is due on vouchers (i.e. at point of sale
or redemption). It also includes rules for vouchers
passing through distribution chains and general
means of payment. The new rules will enter into
force on 1 January 2015. |
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Background:
Currently there are no EU VAT rules on how transactions
involving vouchers should be dealt with. In the absence
of common rules, Member States have developed their own
practices. These are not coordinated and frequently
cause problems for businesses and VAT collection. When a
voucher is issued in one Member State and used in
another, it is not always clear at what point the
transactions linked to the voucher should be taxed. This
is, for example, the case for international hotels
promoting accommodation through vouchers in several EU
Member States.
The objective of today's proposal
is to clarify and harmonise the EU rules on the VAT
treatment of vouchers. This will have a positive effect
on businesses by eliminating situations of double
taxation and uncertainty about tax compliance
obligations. It will also help to close loopholes which
facilitate tax avoidance by certain companies exploiting
the mismatches between Member States. The new rules also
fit well in the broader strategy of the Digital Agenda
Europe, especially its objective to create a digital
single market.
Firstly, the Commission proposes to harmonise the
definition of vouchers for VAT purposes and the point of
taxation for voucher transactions, to prevent mismatches
which result in double taxation or double non-taxation.
The time of taxation will be determined by the nature of
the voucher, thereby clarifying if the tax should be
charged when a voucher is sold or when it is redeemed
for goods and services.
Secondly, the new rules
draw a clear line between vouchers and other means of
payment. The growing number of mobile devices makes it
necessary to distinguish between prepaid telecom credits
(which are vouchers) and mobile payment services (which
are taxed differently). Changes in payment technology,
notably the increasing use of mobile payments, require
that any room for confusion is removed.
Thirdly, the Directive sets up common rules for the
distribution of vouchers in a chain of intermediaries,
especially where this extends across two or more Member
States. A phone card for example can change hands
several times in a distribution chain before it reaches
the consumer and the businesses concerned need certainty
about their tax obligations.
A number of other technical measures are included to
deal with the right of deduction, redemption and
reimbursement procedures, the person liable for payment
of the tax and other obligations for businesses.
The Commission proposal is accompanied by an Impact
Assessment. It concludes that the only effective way to
deal with the identified shortcomings is to include the
new provisions for vouchers in the VAT Directive.
Source::::
EUROPEAN COMMISSION, dated 12/02/2015......... |
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