- Case Overview: A company sought a VAT ruling for distributing pre-paid mobile phone top-ups to a British partner, arguing that off-line top-up codes are single-purpose vouchers and subject to VAT in the UK, with invoices marked “reverse charge”. The same argument was applied to online top-ups.
- Tax Authority’s Position: The Director of the National Tax Information Service disagreed, referencing a 2012 CJEU judgment. The authority classified GSM top-ups as vouchers for various purposes, indicating that VAT should be applied based on the provision of services, not the transfer of vouchers. Thus, invoices should not be marked “reverse charge”.
- Provincial Administrative Court Decision: The Provincial Administrative Court upheld the tax authority’s decision, asserting that GSM top-ups are multi-purpose vouchers. VAT is applicable at the time of redemption, not at the time of sale, and invoices cannot be issued with the “reverse charge” annotation.
- Supreme Administrative Court Ruling: The company appealed to the Supreme Administrative Court, which confirmed the lower court’s decision. The SAC emphasized that the type of voucher is determined by its redemption conditions, meaning VAT is due upon redemption, not issuance.
- Implications for VAT: The ruling clarifies that for multi-purpose vouchers, VAT is only applicable at the time of redemption. This impacts the timing of the tax obligation for companies selling vouchers and top-up codes, aligning VAT liability with the voucher’s use by the customer.
Source MDDP
See also
- ECJ Cases – C-520/10 (Lebara) – Sale of Lebara calling cards constitutes one delivery to distributor
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