VAT rules for “vouchers” do not apply to “discount coupons”

• The Italian Tax Authority has ruled that the EU Voucher Directive does not apply to discount coupons that only offer a reduction in the purchase price net of VAT.
• Recital No. 4 of the EU Voucher Directive states that instruments entitling the holder to a discount upon purchase of goods or services but carrying no right to receive such goods or services should not be targeted by these rules.
• The use of discount coupons results in a reduction of the price paid by the consumer and a reduction in the taxable amount for VAT purposes.
• The ruling did not address the application of regulatory and tax rules related to prize-winning operations.
• When organising promotional activities, it is important to consider the nature of the instruments provided to determine whether they qualify as “single or multi-purpose vouchers” or simply as “discount coupons”.

Source DLA Piper

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