Here's what to consider to record vouchers correctly – because anyone who sells vouchers has to follow certain tax rules.
We've researched the key points on accounting for vouchers and summarized them here. Taxes are a tedious subject, but you can't ignore them – and that includes when you sell vouchers. For VAT purposes, not all vouchers are the same, and what is correct for a value voucher is handled quite differently for a service-specific voucher.
So in this post, we give you an overview of the key tax principles for selling vouchers (based on German tax law). First, it helps to know which types of vouchers there are:
Vouchers in accounting – what to watch out for:
Value vouchers: vouchers for your entire range
With this type of voucher in particular, it pays to know the tax rules – otherwise you may end up paying more tax than you need to. Value vouchers are recorded without affecting profit, because for tax purposes they are regarded not as a service but as a means of payment.
In other words, when a voucher is bought, one means of payment is simply exchanged for another: money for a voucher. VAT therefore only becomes due when the voucher is redeemed.
But: for cash-basis accounting (Einnahmen-Überschussrechnung), the voucher must already be recorded as income when it is sold.
Service-specific vouchers: vouchers for a specific service
Vouchers for one specific service in your range – such as a massage or a dance course – are treated differently. Because the voucher's content is clearly defined, it no longer counts as a means of payment but as a down payment: it can't be used for anything in your range, only for that one service.
This means: the sale of the voucher is already recorded as affecting profit.
VAT must therefore, in accordance with Section 13 (1) sentence 1 no. 1 letter a sentence 4 of the German VAT Act (UStG), already be recorded when the voucher is sold.
Coupons and discount vouchers: given away for free
Coupons and discount vouchers aren't sold – they're gifts from the retailer to its customers, so of course no tax is due on them. The more interesting question here is how liabilities and provisions are handled. Because the discounts are tax-neutral, unredeemed vouchers cannot be recorded as such at the end of the year.
This is based on a ruling by Germany's Federal Fiscal Court. Actual redemption of the vouchers is too uncertain for them to be recorded as a liability.
To be recorded as a provision, however, the vouchers would have to apply to services in the current year and not the coming year.
We hope this article has given you a useful overview of the tax rules for vouchers. Please bear in mind, though, that gurado doesn't provide legal or tax advice. We're happy to share what we've researched, but we can't guarantee it's up to date – new rulings can change the rules described here. We strongly recommend talking to a tax adviser.
Sources consulted for this text (in German):
http://www.haufe.de/steuern/rechtsprechung/rueckstellungen-bei-ausgabe-von-gutscheinen_166_144118.html
http://www.rechnungswesen-verstehen.de/jahresabschluss/rueckstellungen.php
http://www.lexware.de/werbung-und-verkauf/geschenkgutscheine-so-erzielen-sie-mehr-umsatz
http://www.haufe.de/finance/steuern-finanzen/umsatzsteuer-wie-gutscheine-zu-behandeln-sind_190_76132.html
