Taxation of the transfer of single-purpose vouchers

Since 2019, the issue and transfer of a so-called single-purpose voucher has been considered for VAT purposes, under Section 3 (14) sentence 2 of the German Value Added Tax Act (UStG), as a supply of the goods or provision of the other services to which the voucher relates. VAT is therefore payable to the tax office at the time the voucher is transferred. In the case of a single-purpose voucher, both the place of performance to which the voucher relates and the tax owed for the service must be determined at the time of issue. Otherwise, it is a so-called multi-purpose voucher, in which case VAT is only payable when the voucher is redeemed. In its decision of June 25, 2025 (case no. XI R 14/24 (XI R 21/21)), the German Federal Fiscal Court (BFH) ruled on the criteria according to which a voucher is to be classified as a single-purpose or multi-purpose voucher.

In the case in dispute, a civil law partnership (GbR) sold voucher codes (known as X-Cards) via its online shop for recharging user accounts for the X network (an electronic portal with digital content). End users were able to access many different electronic services on the X network. The X-Cards with different country codes were issued by Y, based in the United Kingdom. The GbR had purchased the codes with the country code DE for customers residing or habitually residing in Germany and with a German X user account from intermediaries in other EU member states. It therefore assumed that the X-Cards were value or multi-purpose vouchers and did not include them in its VAT returns. However, the tax office and the tax court considered the distribution of the voucher codes to be taxable transactions in Germany and assumed that they were single-purpose vouchers.

As part of the appeal proceedings, the BFH referred the matter to the ECJ for clarification. In its judgement of April 18, 2024 (case no. C-68/23), the ECJ ruled that, for classification purposes, only the place of supply to the end consumer at the time the voucher was issued must be determined; whether the voucher was previously transferred via intermediaries is irrelevant. The BFH has now applied the legal requirements of the ECJ, according to which the taxation of vouchers does not depend on the distribution channel. Purchases made directly from the issuing entrepreneur are therefore taxed in the same way as purchases made through one or more intermediaries.

The BFH thus confirmed the legal opinion of the lower court. This is because the vouchers in question fulfilled the requirements of a “single-purpose voucher”: at the time the voucher was issued, both the place of delivery of the goods or provision of the services to which the voucher relates and the VAT owed for this were already determined. Taking into account the terms of use of the X-Cards, in particular the country code DE, which states that the X-Cards must be used in Germany, the place of supply is within Germany. Use contrary to the terms of the contract or transfer by intermediaries in the rest of the Community does not preclude the assumption of a single-purpose voucher. The possibility of the end consumer moving after purchasing a single-purpose voucher does not lead to any other assessment, because only the circumstances at the time the voucher was issued are decisive.

Notice:

The BFH decision concerns vouchers issued after January 1, 2019. With regard to the previously applicable legal situation, the BFH refers to its earlier decision of November 29, 2022 (case no. XI R 11/21). According to this, the collection of payment for the issue of a voucher traded as goods before January 1, 2019—before the entry into force of Section 3 (13) et seq. UStG implementing the EU Voucher Directive—led to a tax liability via advance payment taxation. The assessment under the old and new legal situations therefore does not differ in practice, and taxable and liable transactions exist in both cases.