Gift Cards and the EU VAT regulations + accounting software

Gift Cards and the EU VAT regulations + accounting software

AtelierMelon
Visitor
1 0 0

Dear Sir, Madam,

 

I have a question with regards to selling giftcards in the EU via our European-based webshop and the corresponding export that is made towards our accounting software (which is based on Shopify input).

 

According to the 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 all our products have a similar VAT % (21%)). Therefore, by law, they need to be taxed for VAT at the moment in which the card is sold. However, we also want to avoid double-taxing, so when a consumer uses that giftcard the right amount of VAT is processed.

 

An example:

- Consumer A buys a giftcard for €100 and gives that to consumer B. Consumer A's purchase does include 21% VAT, but I cannot mark that in Shopify and hence it's not linked to this purchase (not in the backend of the website, also not in the accounting export)

- Consumer B decides to buy a Jeans for €150, redeems the card, and pays €50. Of that, €8,68 is VAT and processed in Shopify (and hence in the accounting export)

- Both consumer A & B have done everything right and pay the right amounts on my webshop

- I, as shopowner, need to pay VAT over the €100 and the €50, meaning a total of ~€26. However, only the aforementioned €8,68 is processed by Shopify. In the export of Shopify, the VAT of the €100,- giftcard is never processed as tax.

 

Is there a way to make sure Shopify marks the giftcard as a VAT/Tax required product, so that of all the giftcards the 21% VAT is marked to export to the accounting software?

 

With kind regards

 

 

 

 

 

 

 

 

 

Reply 1 (1)

Annieli
Tourist
5 0 1

Hello AtelierMelon,

You are a little bit confused about the concept of the gift voucher. Single purpose gift voucher is something which can be "exchanged" for a specific product or service. For example you sell a gift voucher for a trip to Thailand with exact dates , route etc. and it can not be used for a trip to Malesia or any other country, so the purpose of the voucher is defined at the moment of the sale.   In your case you have multi-purpose voucher , that can be exchanged for a number of different items in the store, as such the voucher holder can redeem the voucher for jeans (and add 50 EUR as additional payment if the voucher is 100 EUR and the price tag is 150 EUR). It also can be demonstrated from accounting point of view: when you sell a single-purpose voucher you account for the sale of the merchandise at the moment of the sale and the chargeable event for VAT  happens at this exact moment. When you sell multi-purpose voucher you do not account for the sale and VAT , you , technically, "exchnage" one form of money into another. In your books multi-purpose voucher is your debt to the customer. When the multi-purpose gift card is redeemed then the VAT chargeable event occurs and  the sale and VAT is accounted for.

So in your case we clearly see that the multipurpose gift card is used and in your books you will account for 150 EUR of sales inclusive of VAT - it could be 21 percent or 25 if you sell into another EU country under a special VAT scheme (Union OSS scheme). And when the card is sold you do not charge any VAT to the buyer. 

As a matter of fact single purpose voucher is a rather rare thing for online traders. EAS allows for exact handling of gift cards in Shopify. your sales of multipurpose gift cards will be accounted separately and will not be included into fiscal reporting. When the gift card is redeemed we will include the redeemed cost of the gift card into the fiscal report as part of the payment and VAT will be accounted for. 

 

I hope this can help you, if you have more questions, welcome to contact us at EAS.

Book a meeting with us here (link: https://meetings.hubspot.com/robert662/30-min-demo ) or check out EAS EU VAT automation (link: https://apps.shopify.com/eas-eu-compliance ) at Shopify App store 

 

Warm regards.