Germany: Summary of VAT developments

City cards sold by a Swedish company to tourists who visit Stockholm are classified as “multi-purpose vouchers”

City cards sold by a Swedish company to tourists who visit Stockholm are classified as “mu

The Court of Justice of the European Union (CJEU) held that city cards sold by a Swedish company to tourists who visit Stockholm are classified as “multi-purpose vouchers” for purposes of the EU Voucher Directive 2016/1065 of 27 June 2016, which has applied to EU Member States since 1 January 2019.

The case is: Dsab Destination Stockholm C-637/20 (28 April 2022).

KPMG observation

It is unclear whether the city card at issue in this case would have been treated by German tax authorities as a multi-purpose voucher under the EU directive because under German law, tickets for cinemas and museums and comparable instruments generally do not fall within the category of voucher and also multi-purpose vouchers must be marked as such.

Multi-purpose vouchers are more advantageous in terms of VAT than single-purpose vouchers in that they are only subject to VAT at the time of their redemption and insofar as they offer cash flow advantages or, in the event of non-redemption, there is ultimately no taxation. On the other hand, in practice with multi-purpose vouchers, there are often challenges in the correct VAT mapping in the (cash register) systems.

Read a May 2022 report [PDF 280 KB] prepared by the KPMG member firm in Germany


Other recent VAT developments that may affect businesses in Germany include the following items:

  • VAT exemption of private hospitals (CJEU, ruling of 7 April 2022 – case C-228/20 – I GmbH)
  • No reliance on Union law for supplies in the area of sport (German Federal Tax Court, ruling of 21 April 2022, V R 48/20 (V R 20/17))
  • Zero-rated intra-Community supplies of goods (German Ministry of Finance, guidance of 20 May 2022 – III C 3 - S 7140/19/10002 :011)
  • Reverse charge procedure on supplies of telecommunications services (German Ministry of Finance, guidance of 2 May 2022 – III C 3 - S 7279/19/10006 :004)

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