Germany: VAT treatment of vouchers (CJEU judgment)

Judgment clarifies when a voucher qualifies as a single-purpose voucher, and discusses the VAT consequences of the resale of a multi-purpose voucher

Judgment clarifies when a voucher qualifies as a single-purpose voucher

The Court of Justice of the European Union (CJEU) on 18 April 2024 held that a voucher constitutes a single-purpose voucher (SPV) subject to value added tax (VAT) upon each (re)sale (versus a multi-purpose voucher (MPV) subject to VAT upon redemption) if both the place of supply of the goods or services for which the voucher can be redeemed, and the VAT payable on the goods and services, are known at the time the voucher is issued.

The case is: C-68/23 (M-GbR vs Finanzamt O)


The case involved a German reseller of so-called “X-cards” issued by a UK company, which can be used to purchase digital content. The X-card is country-locked, meaning it can only be used by end users in one country (Germany in this case). The German reseller argued that the X-cards were MPVs because the VAT treatment of the X-cards was not clear at the time of sale and did not charge VAT on the resale of the cards. The German tax authorities disagreed, arguing that the X-cards were SPVs and that German VAT was due on the resale of the X-cards.

The CJEU held that to qualify as an SPV, two conditions must be fulfilled at the time the voucher is issued: the place of supply of the goods or services for which the voucher can be redeemed must be known; and the VAT payable on those goods or services must be known. The court found that the first condition was met because the X-cards could only be used in Germany and the digital services for which the X-cards could be redeemed are generally taxable at the place of destination (i.e., the customer’s place of residence). The court remanded to the referring court, however, to determine whether all the services for which the X-cards can be redeemed are taxable at the same VAT rate (and tax base) and thus whether the second condition for SPV treatment was met.

The court also stated that even if the referring court finds that the X-cards must be treated as MPVs, resale of the X-cards may still be subject to VAT as a distinct supply of an independent service (e.g., a distribution or marketing service) to the person who ultimately supplies the goods or services in return for redemption of the MPV. 

KPMG observation

This is only the second CJEU case dealing with the VAT treatment of vouchers under the EU VAT rules that have been in effect since 2019. While the judgment provides some further clarity on the operations of those rules, it leaves room for interpretation, potentially leading to differences in application between EU member states and the need for further referrals to the CJEU.

Read an April 2024 report prepared by the KPMG member firm in the Netherlands



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