VAT on Discount Vouchers

VAT on Discount Vouchers

Didn't find your answer?

UK VAT Registered Client, has an online User generated content platform (UGC) with worldwide user base .

He has been approached by a French based "EU VAT registered business (B2B)" to run online Discount vouchers deals.

The demographic target is clients' French user base.

Client has an agreement to produce discount vouchers which can be redeemed at the merchants which the Client would reimburse partially or fully.

Client will be paid on commission based on total discount vouchers sold/redeemed.

Clients would handle all monies from the sell and all refund in the first instance, then invoice the French business minus their commission. 

What is the VAT implication on sale?

Thanks

Replies (1)

Please login or register to join the discussion.

avatar
By H8Accounting
15th Sep 2013 13:14

As both are VAT registered, the voucher company based in France cannot charge VAT on its commission.

Your client will have to pay VAT on the voucher value not the product value.

E.g. Product or service will be advertised as £50 but the voucher company will be offering at a discount rate of say £12.

So the voucher value is £12, of which VAT is £2  and that is owed to the tax man.

Like a normal sale, really. 

Thanks (0)