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VAT Settlement for Cash Bonuses: Rules and Documentation Requirements for Taxpayers

  • Taxpayers often give cash bonuses to boost sales
  • VAT taxation rules for cash bonuses depend on the purpose of the payment
  • VAT applies to paid goods and services in the country
  • Cash bonuses must be linked to a service to be subject to VAT
  • A direct link between payment and service is required for VAT taxation
  • Cash bonuses must be documented with an invoice if they are considered payment for a service
  • There must be a causal link between the service and the received payment for VAT to apply


Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.


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