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Czech Republic: VAT treatment of benefit cards

Czech Republic: VAT treatment of benefit cards

A tax advisory group has stated its agreement with the Czech tax authority (General Financial Directorate (GFD)) on the value added tax (VAT) treatment of benefit cards.


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Benefit cards enable their holders to acquire pre-defined benefits from pre-defined benefit providers; however, the specific benefit and its provider are selected by card holders themselves. In most cases, benefit cards represent non-monetary components of remuneration paid to employees who, after submitting their cards, may make certain purchases of goods or services such as access to selected sports centres.   

The advisory group proposed three model situations for assessment:  

  • Benefit cards intended for one type of benefit 
  • Benefit cards serving as a payment tool 
  • Benefit cards giving the holder the right to draw benefits from individual providers

The GFD agreed and decided to consider benefit cards vouchers under a provision of the VAT law—even if no paper form is involved. Thus, when only one type of benefit can be obtained, it is a single-purpose voucher. When various benefits can be drawn, it is a multi-purpose voucher. The handing over of a benefit card to the holder, and the payment for the card by the card payer do not constitute a financial service. 

Read a March 2020 report prepared by the KPMG member firm in the Czech Republic

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