- Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax [2006] OJ L347/1.
- The difficulties encountered are discussed extensively in the Proposal's impact assessment; see document SWD(2012) 127 and the executive summary document SWD(2012) 126. See also the Deloitte report Study of the VAT Treatment and Quantification of Vouchers at an EU Level for the Provision of Economic Analysis in the Area of Taxation, Final Report of 14 July 2010 (as revised).
- COM(2012) 206 final.
- Gutscheine in German or bons in French.
- An example of an SPV is where a service provider sells vouchers (either directly or via an agent) which carry an entitlement to a defined service (eg, telecommunications) to be supplied in one particular Member State.
- SWD (2012) 127, p 30.
- An example would be where an international hotel chain seeks to promote its products through vouchers which can be redeemed for accommodation in its establishments in any of several Member States. Another would be where prepaid credit could be used either for telecommunications (standard rated for VAT) or to pay for public transport (where a reduced rate may apply).
- Presumably a rebate voucher is the same as a discount voucher.
- The Staff Working Document (SWD (2012) 127, p 30) defines a free voucher as ‘one that is issued without any charge, normally with the intention of promoting a product or a service… A discount voucher can probably be seen as a subcategory of free vouchers. The discount can be expressed either as a percentage or as a fixed amount. It represents a right to a discount either directly from the issuer or from the redeemer of the voucher. It does not
- SWD (2012) 127, p 31.
- Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market amending Directives 97/7/EC, 2002/65/EC, 2005/60/EC and 2006/48/EC and repealing Directive 97/5/EC (Text with EEA relevance) [2007] OJ L319/1.
- ‘Payment account’ means an account held in the name of one or more payment service users which is used for the execution of payment transactions; Art 4 (point 14).
- ‘Payment transaction’ means an act, initiated by the payer or by the payee, of placing, transferring or withdrawing funds, irrespective of any underlying obligations between the payer and the payee; Art 4 (point 5).
- ‘Payment service provider’ means bodies referred to in Art 1(1) and legal and natural persons benefiting from the waiver under Art 26; Art 4 (point 9).
- ‘Direct debit’ means a payment service for debiting a payer's payment account, where a payment transaction is initiated by the payee on the basis of the payer's consent given to the payee, to the payee's payment service provider or to the payer's own payment service provider; Art 4 (point 28).
- ‘Payment instrument’ means any personalised device(s) and/or set of procedures agreed between the payment service user and the payment service provider and used by the payment service user in order to initiate a payment order; Art 4 (point 23).
- cf Case C-419/02 BUPA Hospitals Ltd and Goldsborough Developments Ltd v Commissioners of Customs & Excise [2006] ECR I-1685 in which the ECJ noted that VAT is a tax on supplies of goods or services, not on payments. Therefore, payments on account can only be linked to future supplies of goods or services if, at the time of payment, those supplies have been identified clearly.
- cf Case C-40/09 Astra Zeneca UK Ltd v HMRC [2010] ECR I-7505 in which the ECJ confirmed that a company giving face-value retail vouchers (conferring a right to goods or services) to its employees as part of their remuneration was in receipt of a supply of services for consideration and that this was subject to VAT.
- According to the Explanatory Memorandum (p 13) the concept of ‘nominal value’ is crucial in establishing order in taxation, particularly for intra-EU operations, as it ensures that the value of an MPV is constant between the beginning and the end of a distribution chain.
- In Case C-520/10 Lebara Ltd v Commissioners for Her Majesty's Revenue & Custom [2012] ECR I-0000 the ECJ took a different stance and decided that a telecommunications services operator which offers telecommunications services consisting in selling to a distributor phone-cards which display all the information necessary for making international telephone calls by means of the infrastructure provided by that operator and which are resold by the distributor, in its name and on its own behalf, to end users, either directly or through other taxable persons such as wholesalers or retailers, carries out a supply of telecommunications services for consideration to the distributor. On the other hand, that operator does not carry out a second supply of services for consideration, this time to the end user, where that user, having purchased the phone-card, exercises the right to make telephone calls using the information on the card.
- This is in line with the judgments of the ECJ in Case C-18/92 Chaussures Bally SA v Belgian State, Minister for Finance [1993] ECR I-2871; Case C-86/99 Freemans plc v Commissioners of Customs & Excise [2001] ECR I-4167; and Case C-149/01 Commissioners of Customs & Excise v First Choice Holidays plc [2003] ECR I-6289.
- Case C-288/94 Argos Distributors Ltd v Commissioners of Customs and Excise [1996] ECR I-5311.
- Case C-48/97 Kuwait Petroleum (GB) Ltd v Commissioners of Customs and Excise [1999] ECR I-2323.
- Case C-317/94 Elida Gibbs Ltd v Commissioners of Customs and Excise [1996] ECR I-5339.
- Case C-427/98 Commission of the European Communities v Federal Republic of Germany [2002] ECR I-8315.
- Which would have ended in a muddled situation anyway since the voucher is deemed to be inclusive of VAT.
- Figures based on the Deloitte study.
- In SWD (2012) 127, p 11 the following example is given: ‘Recurrent problems occur with telephone pre-payment cards, illustrating the problems created by uncertainty on the time of taxation. When a pre-paid credit is issued in one Member State where it is regarded as a payment on account for the service (and taxed upfront) and subsequently used in a Member State which taxes the telecommunications service received against the voucher when the service is supplied, both will levy VAT. The former however will tax when the voucher is issued and the latter when it is used (or redeemed). This is legitimate from both perspectives, but the result is double taxation. In the converse situation no Member State would levy VAT and the result is unintended non-taxation.’
- Applying the same reasoning as in Case C-277/05 Société thermale d'Eugénie-les-Bains v Ministère de l'Économie, des Finances et de l'Industrie [2007] ECR I-6415 to vouchers where a payment has been made but the voucher is never redeemed with the result that there has been no supply of goods or services for consideration.
World Journal of VAT/GST Law
Volume 1, 2012 - Issue 1