European Court of Justice (ECJ) - Decision on VAT Classification for Vouchers

April 25, 2024
European Court of Justice (ECJ) -  Decision on VAT Classification for Vouchers

In 2019, German business M-GbR sold Sony PlayStation Store gift cards (PSN Cards), which could only be redeemed by accounts registered in Germany. M-GbR considered these gift cards as multi-purpose vouchers (MPVs), not subject to VAT, arguing that the end consumer's residence was uncertain at the time of purchase. However, many non-German customers bought these vouchers by providing false location information.

After a meticulous audit, the German tax authorities classified the gift cards as single-purpose vouchers (SPVs), with the place of supply being Germany, due to their exclusive use by German residents. The authorities maintained that customers evading usage conditions by providing misleading data did not alter the vouchers' classification. 

The German Federal Fiscal Court (BFH) raised intricate questions about how voucher distribution chains impact VAT treatment and referred the case to the ECJ.

Case Analysis and Decision

In case C-68/23, the ECJ stated that a voucher can be classified as an SPV even if it undergoes successive transfers between intermediaries in various countries before reaching the final customer. The classification depends on two conditions known at the time of issuance: the place of supply of the goods or services and the VAT payable on those goods or services.

The ECJ clarified that for a voucher to be an SPV, these conditions must be clear at the time of redemption. It should be evident that VAT applies when the goods or services are provided to the voucher holder, making the place of supply during intermediary transfers irrelevant. If classified as an SPV, sales between intermediaries are subject to VAT.

In the case of M-GbR, the ECJ's case ruling was clear: the place of supply for the electronic services linked to the vouchers had to be known at issuance. Despite customers from other countries using the cards for price advantages, the ECJ determined that the place of digital content supply was Germany. The ECJ strongly emphasized that abusive practices should not, and will not, influence VAT classification.


The ECJ decision clarifies that the VAT treatment of vouchers remains unchanged even if they are used in countries other than intended through deceptive practices. Additionally, it confirms that a voucher can still be classified as an SPV, even if it undergoes multiple transfers between intermediaries in different countries before reaching the final customer.

Source: Judgment of the ECJ - Case-68/23;Grant Thorton

Best Regards, Vatabout team