Keep this in mind when using gift vouchers!

Balázs Földes
The VAT rules in force since January 2019 still do not provide enough details on some specific situations related to the use of vouchers. This can even lead to unintentional tax defaults, resulting in tax penalty and the risk of late payment.
From January 2019, new common rules have been introduced for the VAT treatment of vouchers in all EU Member States, including Hungary. The rules in force distinguish between vouchers that can be redeemed for one type of product (such as a book voucher) and vouchers that can be redeemed for multiple products (e.g. vouchers that can be redeemed for any product in a supermarket chain).

The treatment of the two types of vouchers in the VAT system is completely different for the issuing companies, the points of sale and the voucher distributors. The transfer of single-purpose vouchers is subject to VAT at every step, as if the product itself was sold (e.g. selling a book in case of a book voucher). At redemption, the point-of-sale bills the product to the issuer of the voucher, not to the actual buyer of the product. The transfer of a multi-purpose voucher, conversely, is outside the scope of VAT and the point-of-sale bills the product to the actual buyer. in practice treating the voucher as having received cash.

Based on consultations with the Tax Authority it is not always immediately clear whether a voucher is a single-purpose or a multi-purpose one. For example, a book voucher can still be a multi-purpose voucher if it can be redeemed for a poster or music CD in a bookstore, while a voucher for any product in a furniture store may still be a single-purpose voucher if it is clear that only products with the standard VAT rate of 27% are available in the furniture store.

Most voucher redemption points have problems, for example, with proper billing in cases where the buyer pays partly using vouchers and partly in cash. In this case, companies may have to follow a completely different procedure from previous billing practices (such as billing one product in two invoices, one to the buyer and one to the issuer of the voucher). In addition, recording such cases in cash registers is also problematic, as today's cash register logic is not perfectly suited for capturing special situations such as a sale being partially subject to VAT (cash purchase price) and partly non-VATable (voucher purchase price).

The EU directive does not fully explain what a taxpayer has to know, and so the Hungarian implementation cannot cover every special case, either. This can lead to maladministration by businesses, which can even result in a tax underpayment for a company, which is aggravated by the risk of tax fines and late payment interest. If a taxpayer uses vouchers, whether as an issuer, distributor, redemption point, or even as an employer offering benefits to employees, it is worth reviewing whether the current practice is consistent with the new legislation and the interpretations of the Tax Authority. In reviewing unclear cases, it is worth consulting with your tax advisor.