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VAT: ‘Money Off Vouchers’ and ‘Cash Back Schemes’ – What Are the Problems and How Can They Be Solved?

VAT: ‘Money Off Vouchers’ and ‘Cash Back Schemes’ – What Are the Problems and How Can They Be... Specific VAT issues currently exist with regard to situations where specific 'money off vouchers' are used as part payment for the supply of goods and services or, for example, where the purchaser of goods can use a 'cash back voucher' to get a partial payment from the manufacturer of the goods for the purchase price that purchaser paid to the retailer selling these goods. The EU VAT Directive does not provide for rules on the treatment of such transactions, and the guidance given by the Court of Justice of the European Union (CJEU) leaves numerous issues unsolved. In order to solve these issues, the European Commission has proposed several amendments to the EU VAT Directive. In this article, I will first identify all VAT issues related to these types of transactions. Then I will describe the Commission proposal, and demonstrate that this proposal does not address or solve all these issues. I will end this article with an alternative proposal that, in my view, solves the relevant VAT issues. This solution is based on the principle that, where two persons pay for or fund a transaction, under specific circumstances, both persons should be entitled to a proportionate deduction of the VAT due on this transaction. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png EC Tax Review Kluwer Law International

VAT: ‘Money Off Vouchers’ and ‘Cash Back Schemes’ – What Are the Problems and How Can They Be Solved?

EC Tax Review , Volume 21 (5) – Sep 1, 2012

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Publisher
Kluwer Law International
Copyright
Copyright © Kluwer Law International
ISSN
0928-2750
Publisher site
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Abstract

Specific VAT issues currently exist with regard to situations where specific 'money off vouchers' are used as part payment for the supply of goods and services or, for example, where the purchaser of goods can use a 'cash back voucher' to get a partial payment from the manufacturer of the goods for the purchase price that purchaser paid to the retailer selling these goods. The EU VAT Directive does not provide for rules on the treatment of such transactions, and the guidance given by the Court of Justice of the European Union (CJEU) leaves numerous issues unsolved. In order to solve these issues, the European Commission has proposed several amendments to the EU VAT Directive. In this article, I will first identify all VAT issues related to these types of transactions. Then I will describe the Commission proposal, and demonstrate that this proposal does not address or solve all these issues. I will end this article with an alternative proposal that, in my view, solves the relevant VAT issues. This solution is based on the principle that, where two persons pay for or fund a transaction, under specific circumstances, both persons should be entitled to a proportionate deduction of the VAT due on this transaction.

Journal

EC Tax ReviewKluwer Law International

Published: Sep 1, 2012

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