The tax authority in the Czech Republic issued guidance clarifying the application of value added tax (VAT) on various types of vouchers.
The guidance aims to distinguish between (1) vouchers subject to new VAT regulations and (2) discount vouchers.
An example of a discount voucher, provided by the tax authority, is a CZK 100 voucher that can be used on a purchase exceeding CZK 500 and generally is considered to be a token of value.
The guidance addresses “single-purpose vouchers.” According to the guidance, if single-purpose vouchers are not used within a period of three years of the end of the tax period in which the VAT payer could claim a VAT deduction, then the VAT deduction must be refunded—unless it is shown that the vouchers have been destroyed, lost, or stolen. The fact that a voucher has not been used does not affect the voucher issuer’s tax liability. The same also applies to transfers of single-purpose vouchers within the EU and in third countries.
For “multi-purpose vouchers,” the tax authority considered the method of determining the tax base. The price paid for a voucher represents the base; if this price cannot be determined, it is the nominal value of a multi-purpose voucher.
The tax authority also looked to the use of rounding differences, and gave a number of examples when payment is made by a meal voucher in the form of a multi-purpose voucher. If the customer pays with a meal voucher and the seller does not return cash, the difference is regarded as a “tip” that is not included in the tax base. Rounding differences on the payment by meal vouchers are not included in the tax base.
Read an August 2019 report prepared by the KPMG member firm in the Czech Republic
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.