The Council of the European Union recently adopted a directive aimed at increasing legal certainty for transactions involving vouchers by harmonising national VAT rules in this area.

The directive sets out to reduce the risk of mismatches in national tax rules leading to double taxation, non-taxation or other undesired consequences according to the EU Council.

The directive now defines single-purpose vouchers and multi-purpose vouchers and sets rules to determine the taxable value of transactions in both cases. Member States will have until 31 December 2018 to transpose the directive into national law and regulations and the new provisions will only apply to vouchers issued after that date.