The terms “gift card” or “voucher” (hereinafter jointly “voucher”) are not defined in the law. However, it is used in various laws. For example, vouchers should be tax-free benefits in kind according to § 8 (1) sentence 3 of the German Income Tax Act (Einkommensteuergesetz – EStG). Furthermore, according to Art. 240 § 5 if the Introductory Law of the German Civil Code (Einführungsgesetz zum Bürgerlichen Gesetzbuch – EGBGB) organisers of leisure events that have to be cancelled due to the COVID 19 pandemic can give their customers a voucher.
Civil Law Classification of Vouchers
In civil law terms, a voucher is a right to use the service described in the voucher. This service may be more or less specifically defined (e.g. a hotel stay with breakfast in a standard double room in a certain hotel on a certain date). It may also be expressed in terms of value (e.g. the right to purchase products from a particular furniture store for EUR 50). There are vouchers that must be presented to redeem (e.g. paper vouchers that are not stored electronically). However, many electronic vouchers do not require this. Here, it is often sufficient to provide a sequence of numbers (e.g. vouchers that are redeemed in a merchant’s webshop). The right described by a voucher is regularly time-barred at the end of the third year after the voucher was issued. As a rule, it is not permissible to shorten this period. Something different may apply if a voucher is given away or sold under its value.
Regulatory Classification of Vouchers
Electronic vouchers can be e-money. If a voucher is e-money, the issuer of the voucher needs permission. An electronic voucher is e-money if it
- issued on receipt of funds and
- is accepted by persons other than the issuer
Thus, an electronic voucher is not e-money if the issuer is the only legal entity from which the voucher can be redeemed. Furthermore, an electronic voucher is not e-money if it is covered by, for example, an exception for limited networks or a very limited range of products. A little tip: If you want to know what is behind these exceptions, you should open all the doors in our Advent calendar.
Tax significance of vouchers
Vouchers have a special significance in tax law. Certain vouchers can be given away to employees by employers as a non-cash benefit free of income tax. The type of voucher determines the point in time at which VAT is due on a voucher. In this context, a distinction must be made between single-purpose and multi-purpose vouchers.
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