VAT will soon be charged on vouchers for the purchase of products and services, according to a proposed bill which was debated before the House Finance Committee, yesterday.
Vouchers will be categorised into two types – that of specific purpose and of multi-purpose – with VAT treatment in accordance, said a Ministry of Finance representative.
Committee members also heard that vouchers in the specific purpose category define products, the marketplace and the VAT rate to be paid. In this case, the buyer of the voucher will pay the VAT and not the one who will redeem it, as is the case today.
In the multi-purpose category, the bill provides that the consumer will buy a voucher which does not specify the products that can be obtained. The VAT on multipurpose vouchers will be charged when this is redeemed, so that the corresponding VAT rate can be applied depending on the type of goods and services.
At the same time, Haris Charalambous who heads the VAT Committee of the Institute of Certified Public Accountants of Cyprus, said that a circular should be issued by the Republic’s Department of Taxation specifying when in theory VAT should be paid.
The proposed bill provides for VAT also in the provision of electronic services.