IN view of the recent decision of the Court of Justice of the European Union relating to VAT rules for single face value vouchers, the UK has decided to amend the current Finance Bill in line with the EU laws. The EU has also proposed a change in the common system of VAT.

Vouchers constitute a huge market worth 52 bn euro annually. Pre-paid telecom connections account for about 70% of the voucher market, followed by gift and discount vouchers. But differences in VAT rules followed by different countries result in serious market inefficiencies. This also causes serious DTAA problems for the companies.