Belgium: VAT regime for vouchers
Belgium: VAT regime for vouchers
There has been a value added tax (VAT) regime for vouchers in Belgium since late 2018. The tax authorities in September 2020 released additional guidance concerning the VAT treatment of vouchers.
The EU in 2016 initiated a VAT regime for vouchers—one that was to be transposed by the EU Member States into their national laws by the end of 2018.
Because of time constraints and pending transposition into Belgian law, the Belgian tax authorities initially published a circular at the beginning of December 2018 in order to explain the new VAT rules that were to be effective 1 January 2019.
In September 2020, a new commentary, in the form of a circular (Circular 2020 / C / 121), replaced the guidance from December 2018. A comparison of the prior circular against the new version shows a consistent approach, but there are some new elements.
The concept of "goods"
A voucher is a “prepaid” instrument with an obligation to be accepted as consideration (total or partial) for the delivery of goods or the provision of services. Furthermore, the voucher itself or the corresponding documentation, including the conditions of use of the voucher, must include at least the deliveries of goods or the services to be performed and / or the identity of their potential suppliers.
The 2020 guidance deepens the difference between vouchers and (reduction) vouchers distributed free of charge. In order to qualify as consideration or partial consideration, the voucher must have been acquired for valuable consideration by the first person. In this context, there is an example of a manufacturer of a consumer good that markets a new product. In order to make the new product known to the consumer, it issues a free voucher that the consumer can redeem for the new product in a retail store. These coupons do not fall within the scope of the coupon scheme.
At this level, the circular adds a special case—namely the value voucher issued when a product is taken back in the context of a guarantee. Within the framework of the guarantee, the purchase amount of the item is fully refunded to the consumer by means of a voucher that the consumer can exchange for a new article. After analysis, the 2020 guidance concludes that this reflects two transactions—the return of the goods to the seller, and the issuance of the purchase voucher. The return of the goods is a transaction that takes place within the framework of the guarantee and does not fall within the scope of VAT. The purchase voucher is issued for a consideration, since the customer accepts the voucher as consideration for the reimbursement of the good purchased previously.
Single-purpose vouchers and multiple-purpose vouchers
The distinction between single-purpose vouchers and multiple-purpose vouchers is also examined in the 2020 circular. For single-use vouchers, the VAT treatment of the underlying transaction is established when it is issued, with the result that VAT is due when the voucher itself is issued. In contrast, multiple-purpose vouchers do not meet these conditions. For a multiple-purpose voucher, VAT is only due when it is exchanged. For greater clarity, it is also confirmed that the qualification of the voucher upon issuance cannot change during the validity period (except in instances of abuse or fraud). A subsequent event, such as a rate change or the removal of a product or service from offering, will no longer change the qualification.
Transfers of vouchers between parties
The 2020 circular also resumes the treatment of the transfer of vouchers between the different parties (issuer, supplier, intermediary, and consumer). The 2020 circular does not, however, make many additional comments with respect to the notion of “acting in one's own name” and how it is to be interpreted exactly.
Taxable persons are supposed to transfer single-use vouchers in their own names if they receive a purchase invoice in their names an intermediary for the vouchers and then issue a sales invoice for the subsequent sale of vouchers. These intermediaries are considered as commission agents.
A clarification is also added at the tax-base level regarding the additional charges charged for packaging and shipping costs when transferring multiple-purpose vouchers. These additional costs do not fall under the application of the voucher system and are subject to their own VAT treatment.
Coupons not exchanged
For non-exchanged single-use vouchers, the 2020 guidance repeats that the consumer is not entitled to a refund of the amount of VAT included in the purchase price of the voucher. The prior version of the circular provided that the seller of the voucher was not entitled to reimbursement either. Query whether is this a change of position or an oversight?
Insofar as the transposition of the VAT rules for vouchers into Belgian law is a reflection of the EU directive, the principles of the Belgian guidance remain unchanged. An interesting point of the new circular is the position of the tax administration with regard to vouchers that are given to a consumer (professional) within the framework of a guarantee obligation. Certain specific points are also developed, such as the notion of an intermediary for single-use vouchers, the invoicing of additional costs such as gift wrapping, and the retention of the qualification of the voucher during the period of validity. The 2020 circular does not provide additional answers with regard to certain practical questions, such as the notion of “acting in one's own name” or application of the specific issue of travel vouchers.
Read an October 2020 report (French) prepared by the KPMG member firm in Belgium
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