With a view to adopting the EU Directive 2016/1065 (the “Directive”) amending Directive 2006/112/EC as regards the treatment of vouchers, the Luxembourg Government issued on August 9th 2017 a draft law No. 7166 (the “Draft Law”).
The main objective of the Draft Law is to regulate the VAT treatment of vouchers, issued after December 31st 2018, by introducing specific rules and definitions, in order to avoid inconsistencies in Member States legislations which may result in a distortion of competition or double non-taxation. Telecommunications and broadcasting services are not within the scope of the Directive since these are governed by Regulation 1042/2013/EU of 7 October 2013 which entered into force on January 1st 2015.
In order to achieve this objective, and to distinguish vouchers from payment instruments, the Draft Law defines the notion of “Voucher”, which can have a physical or electronic form, and introduces the distinction between “single-purpose voucher” (the “SPV”) and “multi-purpose voucher” (the “MPV”).
A “Voucher” is defined as “an instrument where there is an obligation to accept it as consideration or part consideration for a supply of goods or services and where the goods or services to be supplied or the identities of their potential suppliers are either indicated on the instrument itself or in related documentation, including the terms and conditions of use of such instrument”. Therefore, only vouchers which can be used for redemption against goods or services should be targeted by these rules. Instruments entitling their holder to a discount upon purchase of goods or services but carrying no right to receive such goods or services are not considered as Vouchers.
The Draft Law provides that, for a SPV, which is defined as a voucher where the goods or services supply as well as the VAT due are already known upon issuance of the Voucher, a supply of goods or services occurs upon each transfer of the SPV. A voucher that entitles its holder to a meal in a specific restaurant is a SPV.
For a MPV, the supply is only deemed to take place upon the actual handing over of the goods or the actual provision of the services upon voucher redemption. A voucher that entitles its owner to a hotel stay in a selected list of countries is a MPV.
In the case of a MVP, to ensure that the amount of VAT paid in respect of the MPV where VAT on the underlying supply of goods or services is charged only upon redemption is accurate, the supplier of the goods or services should account for the VAT based on the consideration paid for the MPV. In the absence of such information the taxable amount should be equal to the monetary value indicated on the MPV itself or in the related documentation, less the amount of VAT relating to the goods or services supplied.
Finally, the Directive provides that, by the end of 2022 at the latest, the Commission shall, on the basis of the information obtained by the Member States, issue an assessment report on the application of the Directive and, where necessary, a proposal of amendment of the rules.