Advertising, coupons and VAT

Advertising, vouchers and free transactions!

reclame en btw

You may not have noticed it yet, but the tax authorities' positions on advertising are evolving. VAT on catering for advertising events has been deductible since 2015, car stickers are no longer seen as a car cost, VAT on spirits tastings is deductible, etc.

You may not have noticed it yet, but the tax authorities' positions on advertising are evolving. VAT on catering for advertising events has been deductible since 2015, car stickers are no longer seen as a car cost, VAT on spirits tastings is deductible, etc.

These are minor adjustments in themselves, which reveal a tendency: the tax authorities give priority to the advertising purpose of costs. Where is the limit and how far can you go?

A recent parliamentary question, in which the Minister of Finance acknowledges that the VAT on most free events is deductible, is a highlight in this respect.

Did you also know that the Belgian provisions on "free" transactions do not comply with the VAT Directive? Nevertheless, audits often focus on everything that smells like "free". This is undoubtedly the reason for enacting the law on the free donation of food leftovers and essential non-food products. But what do you do in other cases?

In the meantime, the Directive on 'vouchers' has been transposed into Belgian law. At first sight, the previous Belgian practice seems to be continuing. A distinction is still made between single-use and multiple-use vouchers. In the case of single-use vouchers, VAT normally becomes payable on each transfer. In the case of multiple use vouchers, this is at the time of redemption. However, there are important nuances and changes that have an impact on daily practice! For example, the definition of single-use vouchers has been broadened and fundamental questions arise about the VAT treatment of vouchers that are resold. In addition, the choice of single or multiple use vouchers has an impact on the payment of VAT in so-called "no-shows". Furthermore, the new legislation - which has been imposed by the European Commission - turns out to be a cheese with very large holes. We even predict that the risk of fraud has increased considerably. A warned man/woman is worth two...

The new legislation does not include provisions on discount vouchers. But also in this area there are important changes in the jurisprudence.

Promotional campaigns are not a simple (VAT) matter. Every situation is different. Are discounts really discounts or rather the reimbursement of a service? What rate do you apply? Can you recover VAT for discounts and other payments you make to your customers?

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Posted by Bart Buelens
Bart Buelens
18 years of experience as VAT advisor. 17 years with big 4. Lawyer for a little while. Passionate by/for VAT. Author. Professor. Member of the editorial board Fiscale Actualiteit (Kluwer). Persistent . To the point. In-dept knowledge of the different legal sources Pragmatic. Optimizations, (preferably) with preliminary consent of the VAT authorities. Dutch. French. English. Notes of German