RD256 - ETNO Reflection Document on the EC consultation paper on modernising the value added tax treatment of vouchers and related issues

The Position Paper focuses on changes to the way vouchers (which are prevalent in the mobile industry for consumers) are taxed, because disparate EU wide treatment means that these may be supplied in such a way that either no tax or double tax results. The EU Commission has issued a consultation paper which ETNO has contributed to, with the intent of having further dialogues with the Commission so that a sensible and pragmatic solution results.
For Multi purpose vouchers (MPV), which are the most prevalent form in the telecommunications industry, ETNO finds VAT must be accounted for when these vouchers are used to receive a specific supply according to that supply. The supplier of the service has an obligation to account for the VAT at this point.

When a voucher is sold, from a VAT point of view the question arises whether the supply character or the consideration character prevails. If the supply character prevails, then a single purpose voucher (SPV) has been supplied and the taxable event may conveniently be taken to be the point of sale. Multi purpose vouchers (MPV) however are the most prevalent form of voucher used in the telecommunications industry and consequently VAT must be accounted for when these vouchers are used to receive a specific supply according to that supply. The supplier of the service has an obligation to account for the VAT at this point, and any business customer must have the right to deduct VAT also at the same point.