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Value Added Tax treatment of vouchers - an uncertain landscape

Lutz, Iljada (2008)
Department of Law
Abstract
In November 2006, the Commission's Taxation and Customs Union Directorate-General published a consultation paper seeking views of 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). Currently there is no common interpretation to the VAT treatment of vouchers and the treatment of vouchers across the Member States differs widely. Some Member States treat the supply of a voucher as a supply of goods or services while others treat its purchase as a payment on account for future supplies. Other Member States do neither of the above and tax instead the supply... (More)
In November 2006, the Commission's Taxation and Customs Union Directorate-General published a consultation paper seeking views of 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). Currently there is no common interpretation to the VAT treatment of vouchers and the treatment of vouchers across the Member States differs widely. Some Member States treat the supply of a voucher as a supply of goods or services while others treat its purchase as a payment on account for future supplies. Other Member States do neither of the above and tax instead the supply of goods or services that occurs at the redemption of the voucher or treat them as a financial service. The objective of this thesis is to identify the main problems in the VAT treatment of vouchers. This thesis concludes that the compatibility between some new forms of vouchers and classic means of payment is one of the most important issues. The main question is around the differentiation between a voucher and a ''general means of payment''. The primary challenge in regards to vouchers arises where vouchers attached to goods are redeemed in a Member State other than where the original sale occurred. The thesis argues that one set of rules for VAT - purposes are preferable and that the definition of some types of vouchers should possibly be reconsidered. The Commission concluded in its summary of results on the Consultation that in order to better harmonize the VAT treatment it is preferable to first harmonize the interpretation of the current rules. Even though that might aim to solve the inconsistencies in treatment of vouchers between Member States, it still leaves some unanswered questions of its practical application particularly in regards to cross-boarder transactions. (Less)
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author
Lutz, Iljada
supervisor
organization
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
EG-rätt
language
English
id
1559939
date added to LUP
2010-03-08 15:55:24
date last changed
2010-03-08 15:55:24
@misc{1559939,
  abstract     = {In November 2006, the Commission's Taxation and Customs Union Directorate-General published a consultation paper seeking views of 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). Currently there is no common interpretation to the VAT treatment of vouchers and the treatment of vouchers across the Member States differs widely. Some Member States treat the supply of a voucher as a supply of goods or services while others treat its purchase as a payment on account for future supplies. Other Member States do neither of the above and tax instead the supply of goods or services that occurs at the redemption of the voucher or treat them as a financial service. The objective of this thesis is to identify the main problems in the VAT treatment of vouchers. This thesis concludes that the compatibility between some new forms of vouchers and classic means of payment is one of the most important issues. The main question is around the differentiation between a voucher and a ''general means of payment''. The primary challenge in regards to vouchers arises where vouchers attached to goods are redeemed in a Member State other than where the original sale occurred. The thesis argues that one set of rules for VAT - purposes are preferable and that the definition of some types of vouchers should possibly be reconsidered. The Commission concluded in its summary of results on the Consultation that in order to better harmonize the VAT treatment it is preferable to first harmonize the interpretation of the current rules. Even though that might aim to solve the inconsistencies in treatment of vouchers between Member States, it still leaves some unanswered questions of its practical application particularly in regards to cross-boarder transactions.},
  author       = {Lutz, Iljada},
  keyword      = {EG-rätt},
  language     = {eng},
  note         = {Student Paper},
  title        = {Value Added Tax treatment of vouchers - an uncertain landscape},
  year         = {2008},
}