Issue and sale of vouchers: Introduction of harmonised regime...Baker & McKenzie LLP is a member...
Transcript of Issue and sale of vouchers: Introduction of harmonised regime...Baker & McKenzie LLP is a member...
Issue and sale of vouchers: Introduction of harmonised regime Webinar
7 December 2016
Ana Royuela | Barcelona (Moderator) Benjamin Bergau | Frankfurt Martin Morawski | Amsterdam Adam Peacock | London
© 2016 Baker & McKenzie LLP
Adam Peacock London
+44 20 7919 1868 [email protected]
Benjamin Bergau Frankfurt
+49 69 2 99 08 252 [email protected]
Speakers
Martin Morawski Amsterdam
+31 20 551 7198 [email protected]
Ana Royuela Barcelona
+34 93 206 08 51 [email protected]
© 2016 Baker & McKenzie LLP
Introduction: Why a Vouchers Directive?
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Vouchers are increasingly being used as a mechanism to increase sales and reach new customers
New types of vouchers/credits/prepayments for goods and services Increase of cross border sale and distribution of "vouchers"
(e-commerce enables cross border B2C sales of goods and services) This results in an increasing importance and complexity of voucher rules
(mainly, but not exclusively B2C).
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Why do vouchers cause VAT problems?
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Unclear legislative framework and lack of consistency on: Definition: what is a voucher? Multiple Purposes vs Single Purpose: MVP/SPV Distribution chain: what if value changes? Distribution/Intermediation Agents Taxable base upon redemption
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Current treatment
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Jurisdiction Key topic Spain • Distribution fee is exempt from VAT as vouchers are regarded as a means of
payment. • Distribution services are therefore regarded as financial services related toa
means of payment.
Germany • Distincion between 'goods/service vouchers' (similar to SPVs with; immediate taxation) and 'face value vouchers' (similar to MPVs with taxation on redemption).
• Under current legislation it is difficult to determine the VAT impllications of goods/service vouchers when services will only be specified upon redemption (e.g. invoicing issues, crediting for unredeemed vouchers, etc.).
Belgium • Issue of vouchers, resale and supply outside the scope of VAT, being characterised as a means of payment.
Austria and Finland • VAT due on issue only if Gift Card entitles the holder to specifically identified purchase, e.g. a voucher for computer game x.
Ireland • Distincion not between SPVs and MPVs, but vouchers sold through a distribution chains, vouchers issued at a discount and vouchers supplied as things in action.
UK • Different treatment for "credit" and "retailer" vouchers. • Issue of all vouchers disregarded until decision in Lebara.
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Elements of the Voucher Directive
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Concept of "voucher" Taxable event Time of taxation Taxable amount Distribution services Unredeemed vouchers
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Elements of the Voucher Directive – Concept of "voucher"
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Single Purpose Voucher
Multi Purpose Voucher
No Voucher (e.g. payment instrument)
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Elements of the Voucher Directive – Concept of "voucher"
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Voucher 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.
Single-purpose voucher A voucher where the place of supply of the goods or services to
which the voucher relates, and the VAT due on those goods or services, are known at the time of issue of the voucher.
Multi-purpose voucher A voucher other than a single-purpose voucher.
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Elements of the Voucher Directive – Taxable event
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Single-purpose voucher Supply of each voucher. Actual underlying supply is not subject to
VAT. Multi-purpose voucher
Actual underlying supply. The supply of each voucher is not subject to VAT.
EUR 9 EUR 10
Voucher Voucher
Telecom service
Telco Distributor End-customer
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Elements of the Voucher Directive – Time of taxation
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Single-purpose voucher At the time of the supply of the voucher.
Multi-purpose voucher At the time of the actual underlying supply. What about (partly) unredeemed vouchers?
EUR 9 EUR 10
Voucher Voucher
Telecom service
Telco Distributor End-customer
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Elements of the Voucher Directive – Taxable amount
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Single-purpose voucher The consideration actually received for the voucher.
Multi-purpose voucher The consideration "paid" for the voucher or in the absence of such
information, the monetary value indicated on the multi-purpose voucher itself or in the related documentation.
EUR 9 EUR 10
Voucher Voucher
Telecom service
Telco Distributor End-customer
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Case study – online retailer
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Online retailer (UK)
SPV
£9 (inc. VAT)
E-book (no VAT)
UK customer
Online retailer (UK)
MPV
£9 (no VAT)
E-book (VAT)
UK customer
Online retailer (UK)
Payment Instrument
£9 (no VAT)
E-book (VAT)
UK customer
Single purpose vouchers Taxable amount: £9 Time of supply: issue of voucher VAT due whether or not redeemed. No VAT due on redemption – impact on systems?
Multi-purpose vouchers Taxable amount: £9 Time of supply: redemption No VAT if voucher not redeemed
Payment instruments Taxable amount: 0 Do MPVs consitute payment instruments? Does a security for money constitute an MPV?
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Case study – distributor
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Online retailer (UK)
SPV
£8 (plus UK VAT)
E-book (no VAT)
Distributor (UK)
SPV
£9 (inc. UK VAT)
Online retailer (UK)
MPV
£8 (no VAT)
E-book (UK VAT)
UK customer
Distributor (UK)
MPV
£9 (no VAT)
Distribution services (£1 plus VAT)
Key questions 1. What is the taxable amount upon redemption? 2. Impact on Argos Distributors?
• No VAT applied to distributor's services if distributor acts as principal or undisclosed agent. • If issuer is not retailer, retailer nevertheless regarded as making a supply of the goods/services to the
issuer.
UK customer
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Case study – overseas distributor
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Online retailer (UK)
SPV
£8
E-book (no VAT)
French customer
Distributor (France)
SPV
£9 (inc. French VAT)
Online retailer (UK)
MPV
£8 (no VAT)
E-book (French VAT)
French customer
Distributor (France)
MPV
£9 (no VAT)
Distribution services (£1 subject to r/c)
Hotel (Germany)
SPV
£8 (plus German VAT)
German hotel room (no VAT)
French customer
Distributor (France)
SPV
£9 (inc. German VAT)
r/c liability
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Case study – areas of uncertainty
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Online retailer (UK)
SPV?
£9
E-book
Airport Retailer
SPV?
£9
Clothing
UK customer
Restaurant (UK)
SPV?
£9
Restaurant services
UK customer
UK customer
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Local pending cases
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EUR 9 EUR 10
Voucher Voucher
Telecom service
Telco Distributor End-customer
Questions?
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Issue and sale of vouchers: Introduction of harmonised regime Webinar
7 December 2016
Ana Royuela | Barcelona (Moderator) Benjamin Bergau | Frankfurt Martin Morawski | Amsterdam Adam Peacock | London