VAT Treatment of single-use vouchers clarified in recent BFH ruling.
Introduction
The VAT treatment of vouchers has long posed challenges for businesses and tax authorities alike. The distinction between single-purpose and multi-purpose vouchers is often complex in practice, particularly in digital environments where vouchers can be distributed and redeemed across borders. Determining the place of supply and the applicable VAT rate at the time a voucher is issued or transferred can be difficult.
Recent case law from the German Federal Fiscal Court (Bundesfinanzhof, “BFH”) provides further clarity on this issue, especially for vouchers used to purchase digital content.
Background of the Case
Case XI R 14/24 from 25th June 2025 concerned voucher codes issued for use within the online network “X”, a digital platform offering various electronic services. These vouchers allowed end users to credit their network accounts in order to purchase digital content. The German company had bought the codes from intermediaries established in other EU Member States and sold them on its online shop to end consumers in Germany.
The main question here was whether these vouchers should be treated as single-purpose or multi-purpose vouchers under the VAT rules introduced on 1st January 2019
The rules stated:
- For single-purpose vouchers, the place of supply and the VAT rate are already known at the time of issue. Therefore, VAT becomes due when the voucher is issued or transferred, not when it is redeemed.
- For multi-purpose vouchers, VAT is only due when the voucher is used, since the place of supply or the applicable VAT rate cannot be determined in advance.
The claimant argued that the vouchers should be classified as multi-purpose, since they could be acquired through intermediaries in other EU Member States. However, both the German tax office (Finanzamt) and the German Tax Court (Finanzgericht) disagreed, considering the vouchers to be single-purpose, as the users’ country code (DE) meant the place of supply was clearly located in Germany and the applicable VAT rate of the supply was known.
In order to clarify the issue, the BFH referred the question to the European Court of Justice (“ECJ”) in 2022 (Case C-68/23), and on 18th April 2024 the ECJ ruled that the decisive factor in deciding upon the type of voucher is whether the place of supply to the final consumer is known at the time the voucher is issued. The fact that there were intermediaries in other EU Member States was not relevant.
Based on the ECJ’s decision, the BFH confirmed in its recent decision that the voucher codes for the network X were indeed single-purpose vouchers, given that the vouchers could only be redeemed by consumers with German accounts and only for digital content subject to the standard VAT rate. Hence both the place of supply and the VAT rate were clear, meaning that German VAT was due upon the sale of these, at the time of sale.
Conclusion
The BFH’s 2025 decision provides welcome clarity for companies trading in the digital voucher market. It confirms that the classification as a single-purpose voucher depends on whether the place of supply and the VAT rate are known at issuance, not on the distribution chain or subsequent transfers within the EU. This remains for the most part consistent with the view of the BFH pre-2019.
Should your business be involved in the sale of vouchers, and require any support, please don’t hesitate to contact us, and one of our consultants will be happy to assist you.