Gift Cards and new EU VAT regulations

5 0 2

HI all,


We want to add gift cards to our EU based e-commerce website.

According to the new EU VAT regulation our gift cards would fall in the Single Purpose Voucher (because at the moment of the sale we know it will be used only on our website and only for products that are subject to 22% VAT) and would therefore need to be taxed for VAT at the moment in which the card is sold.

In order to avoid paying taxes twice, when the card is sold and then again when the product is sold, we would have to find a way to deduct the value of the card from the taxable amount of the product purchase (as if it was a voucher) rather than consider it a method of payment.

Has anybody else had the same issue? How did you deal with it? Ideas/Suggestions?

Replies 70 (70)
Shopify Partner
2 0 0

Victor, what is the update on this issue please?


1 0 0

I chatted to the Shopify support today, but they also mainly suggest overriding the gift card settings or using an app. They sent the issue to their tax team and will hopefully get back to me soon. I will keep you updated! 

3 0 1
Thank you! But don't get your hopes up. Kind regards, JW

20 0 14



How about an update on this? Is this just the 3th year in a row I can't offer gift cards to my customers because Shopify doesn't care about European vendors?

I guess it probably is :')

6 0 5

In my understanding you can still offer gift cards to your customers.

It's true that Shopify doesn't do proper tax calculation for EU which is, well, ridiculous.

That being said if you inform your accountant about it, they can do the necessary corrections in your books.

To use Teoalessi listed questions:

1) The seller has to pay sales tax on a single use gift card
-> You export all revenue coming from gift cards and note the VAT due in your books
Reports - Sales - Sales by product - Filter on Product type your gift card name

2) The seller wants to avoid paying it again when the card is used
-> You export all payments where gift cards where used as Payment method and list this.
Reports - Finances summary - Payment by Type

3) what can the seller do to achieve this?
Give both exports to your accountant and let them to do their magic so you don't pay too much taxes.

At least that is my understanding, do check this with your accountant and let me know if they suggest differently. If your accountant confirms it, let me know so I'll be more certain about it as well ;).

*Edited to clarify

20 0 14
Unfortunately that's not the case for every company.

Next to the fact that gift cards for shops that do not charge taxes outside the EU if a whole nightmare on it's own right now because there is no proper taxation setting.
2 0 2

It is unbelievable that shopify still hasn't fixed the issue. 

@Victor, Which steps have been taken so far besides you informing your internal team. Have you received any kind of response at all from them or is it being totally ignored?

39 0 32

Any update!!!


New Member
7 0 0

Dear Shopify,


This inacceptable that after 2 years, there is still no solution to this problem. 

Please escalate this problem higher up the ladder! 


Ignoring all your EU customer is just not ok. 


Kind regars,

Lena Onkelinx


6 0 2

Apparently this still hasn't been fixed? Fortunately we have products with different VAT %s so if I understand correctly, it can be viewed as a multi-purpose voucher.

Another question though is what happens when the gift card expires? If we don't charge VAT on purchase but still receive the money but the customer doesn't redeem the gift card we still need to pay taxes for the money we received. I tried to look into this but found no clear answer on what happens on gift card expiration.

20 0 14

So, any news on this issue? 

Is @Victor still employed by shopify? 

Has anyone figured out how to tackle the gift card issue?

Is it even remotely put on any road map or feature request?


Time for my annual "has shopify done anything with this issue yet" check-in, I guess.

13 0 4


here I am in Dec 2022 having read through all the comments meticulously cannot believe that this is still an issue. With Xmas coming up we really want to promote gift cards/vouchers but with this issue in play would almost want to avoid any sales with the fact of paying VAT 2 fold. 
I fear this re-post is in vain

Shopify Partner
99 8 32

I'm going to throw in my second tuppenceworth. This is likely specific to UK merchants, but may assist EU merchants also. The issue, I think, is that most merchants are viewing gift cards as only being single-purpose vouchers. The definition of this is that you know, in advance, what the vat rate is of the products the voucher will be exchanged for.

However, I think that there's a small loophole here which is easily achieved by every merchant: sell a book. It doesn't matter what you sell, find a book which is aligned with your products. Books are zero vat rated: whilst everything else in your store is standard vat rated, this means that you cannot know the vat rate of the product/s the gift card will be redeemed against, and so it can be treated as a multi-purpose voucher. (the inverse of this is also true - if you sell books, sell a bookmark; if you sell children's clothes, sell an adult hat).



  • in the case of a single-purpose voucher there is sufficient information (in terms of the place of supply and the tax treatment of the supply) to tax the underlying goods or services when the voucher is issued
  • in the case of a multi-purpose voucher it is not possible (at the time the voucher is issued or transferred) to know this information, and thus the underlying goods or services are only taxed when the voucher is redeemed


So the simple addition of just one product with a different vat rate would render all gift vouchers non-vat rated at the point of issue.

20 0 14
Wouldn't work for the EU. Within the EU we now Tax according to the
shipping addresses, which means books will also have the corresponding
country's Tax rate.

This workaround would only work for non EU sellers.
Shopify Partner
99 8 32

In the case of the EU, then, it's actually more straightforward; if rates are set according to the shipping address, and VAT rates change across the EU ( then you don't know which country the goods may be shipped to when someone purchases a gift card; if you're based in Germany (19%), and someone from France (20%) purchases a gift card to send it to someone in Italy (22%), then you have no clue - the card is a multi-purpose card. You don't need to return vat on the card, just goods purchased with it.


(* I'm not a vat expert or a tax accountant - but the rules actually look pretty straightforward here...)

[edited for typo]

New Member
4 0 0

Yes - this was my view too. Extract from my earlier post below:

 - If you don't ship outside the UK then perhaps as workaround you could allow shipping to a non UK place that you are happy to ship to (Channel Islands?) or to a country with a low likelihood of ordering (Vatican State?). That would then allow you to justify voucher as multi purpose rather than single purpose and would likely have no extra book-keeping.


Please note that I am also not an accountant, nor have I had accountancy advice on this.

Shopify Partner
99 8 32

If you don't ship outside the UK then definitely just stock a book...

8 0 4

Any update here? We need to pay VAT from every single gift card sold right after we sell it. This is the EU law.

20 0 14
I wouldn't hold my breath, I think this issue was first flagged 4 years ago at this point and I don't think shopify really gives a fart about the issue.

We don't even know if anyone on the shopify team is even paying attention to this. I've tried contactinformatie shopify through their chat and the only thing they say is "Use an app". Thing is, if I use an app (the only one capable of adding taxes is rise I think), I'll be paying taxes double, since it will also charge taxes for the customers when they check out. Making gift cards entirely unusable for any merchant in the EU that doesn't use multi purpose selling.

20 0 14
I think you might be right...

It does make things a bit less 'clean' on the display end when you use
other currencies than the shop default through markets (I think, I'm trying
it out right now).

I use Euros in my shop for instance, and through enabling markets, people
can purchase in their own currency. Thing is, the amounts become really
weird (100 euros becomes 106.99 USD for instance). I know this can cause
confusion with some customers.

If I manually alter the value displayed in markets to make more sense, I'm
cutting my throat (bonus points for whoever gets this reference).or the

Now, I can probably put a little note in for internationals explaining why
the denomination looks wonky, but it is sloppy in my opinion.

I mean, I'll make it work, but it's a PITA that Shopify didn't think about
this and alter it. I mean, they probably have this issue within Northern
America too right?

* Also not an accountant. I dye yarn for a living, don't take my advice.

1 0 0

Okay tha