Do I also have to charge value added tax on vouchers?
May 6, 2024 | 30,00 EUR | answered by Günther Hering
Dear tax consultant,
I am Edith Sontheimer, owner of a small online shop for handmade jewelry. In my shop, I also offer gift vouchers that customers can purchase to pass on to their loved ones. Now I am faced with the question of whether I have to charge value-added tax on these vouchers.
So far, I have not charged value-added tax on the vouchers, as I assumed that it would only be due when the voucher is redeemed for the actual purchased product. However, I have heard from other entrepreneurs that this may not be correct and that value-added tax should already be charged at the sale of the voucher.
This uncertainty is causing me concern, as I do not want my business to get into tax-related difficulties. Therefore, I would like to know from you whether I do indeed have to charge value-added tax on vouchers and if so, how I can best implement this to act in compliance with the law.
I would be very grateful for a detailed explanation on this topic and possible solutions so that I can continue to run my business successfully and legally.
Yours sincerely,
Edith Sontheimer
Dear Ms. Sontheimer,
Thank you for your inquiry regarding the value-added tax on gift vouchers in your online shop. It is understandable that you are concerned, as tax regulations can sometimes be complex and confusing. I am happy to help clarify this matter for you.
In general, gift vouchers are considered as prepayment for a service that has not yet been provided. This means that the value-added tax becomes due at the moment the voucher is sold, and not only when the voucher is redeemed. This applies regardless of whether the voucher can be redeemed for a specific product or service.
Therefore, you must also charge value-added tax on the sale of gift vouchers. The amount of value-added tax depends on the applicable tax rate for the services included in the voucher. In your case, since you are selling handmade jewelry, the standard value-added tax rate of 19% would apply.
To implement this correctly, you must ensure that the value-added tax on the gift vouchers is indicated and remitted to the tax authorities. You should adjust your accounting accordingly and correctly record the value-added tax on the sold gift vouchers.
There are various ways to implement this in your online shop. For example, you could display the price of the gift vouchers including value-added tax and separately indicate the tax. Alternatively, you could already include the value-added tax in the price of the voucher.
It is important that you consult your tax advisor or tax authorities to ensure that you are correctly implementing all tax regulations. Good bookkeeping and documentation are crucial to avoid tax-related issues.
I hope this information helps you and provides clarity regarding the value-added tax on gift vouchers. If you have any further questions or need assistance, please feel free to contact me.
Best regards,
Günther Hering
