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NEWSLETTER 2022 - 02



Until summer 2021, the VAT treatment of vouchers in Switzerland was clearly regulated: All vouchers had to be declared and settled for VAT purposes only at the time of redemption. Then the Swiss Federal Tax Administration (SFTA) changed their practice, which was confirmed in decision A-2587/2020 of the Swiss Federal Administrative Court (SFAC) of August 10, 2021. The case under review was the one in which the SFTA qualified the turnover from service vouchers that were proven to have been sold but not yet redeemed as advance payments.

What is a value voucher?

(Value) Vouchers are classified by the SFTA as pure means of payment according to the Swiss Federal Administrative case law and the VAT branch info 06 “Retail Trade”. No service is rendered with their sale. They are therefore non-remunerations that are not taxable. Only when redeeming the (value) voucher, the service provider has to pay VAT on the remuneration at the applicable VAT rate. It is irrelevant whether the service provider is also the issuer of the vouchers or not. Documents (invoices, receipts, etc.) for the sale of vouchers may therefore not show any VAT, as otherwise the VAT shown would have to be paid.

What is a payment in advance?

According to case law, advance payments exist if a consideration paid in advance is made for a specific or at least determinable future service/good. An advance payment is subject to VAT at the time of payment and forms part of the taxable amount if it is a payment for a taxable supply and there is an internal economic link between the advance payment and the supply subject to VAT.

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When do (service) vouchers qualify as advance payments?

According to the new practice of the SFTA, the definition of performance within the meaning of the VAT Law does not require that the time of consumption is known or that the consumption has already taken place. According to the SFTA, value vouchers and service vouchers would differ considerably, as in the case of a service voucher the issuer of the voucher would be obliged to provide the service/good specified on the voucher, even if between the purchase and the redemption of the voucher the service specified had increased in value and would cost more at the time of redemption of the voucher than at the time of its purchase. Based on the SFAC's decision, it is only necessary to examine whether the issuer of the voucher has obliged himself to provide a specific or at least determinable service/good in the sense of VAT by selling vouchers. If this is the case, then VAT is already due at the time the service voucher is issued.

If a specific service is described in a voucher, but the voucher and/or the general terms and conditions (GTC) expressly state that another service or good from the service provider's range of services and products up to a certain value can be purchased instead of the service/good mentioned, then according to the unpublished practice of the SFTA, this is not an advance payment, but a value voucher, which is not taxable upon sale, but only upon redemption.

What does a voucher issuer have to consider from now on?

If a company plans to issue or sell vouchers, then caution is now required if the voucher covers a specific service or good. Essentially, it must be examined whether the service provider will commit to providing a specific or at least determinable service/good in the VAT sense by selling service vouchers. This question must be answered from the perspective of the service provider. If the voucher and the GTC do not explicitly state that services or goods other than the specified service/good can also be obtained from the range, the SFTA considers such vouchers to be advance payments that are already taxable upon sale. What is problematic about this practice of the SFTA is that it does not explain this classification in more detail anywhere in its practical publications. The SFTA's information and branch information only ever mentions vouchers, the value of which is not taxable until they are redeemed. What is interesting about the new practice of the SFTA or the decision of the SFAC is that it follows the direction of the VAT qualification that already exists in the EU (distinction between single-purpose and multi-purpose vouchers). In case of doubt, in Switzerland a prior ruling can provide legal certainty about the VAT impacts.

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Of course, we will be happy to assist you with further questions on the subject of vouchers or with the VAT rulings in order to obtain legal certainty about the time of taxation.

Best regards from your VAT/Customs team

Mónika Molnár Florian Hanslik Anita Machin Jane Jachnow

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