Vouchers & Value Cards Finance in Practice, Taxation Unit, GST Team

Transcription

1 Vouchers & Value Cards Finance in Practice, Taxation Unit, GST Team Custodian/Review Officer: Senior Finance Officer, GST Team Version no: 3.0 Applicable To: QH Staff Approval Date: 7/9/2009 Effective Date: 7/9/2009 Next Review Date: 01/03/2014 Authority: Approving Officer Manager GST Team Signature Supersedes: 2.3 Key Words: tax, GST, voucher, stored value, cards, Face Value Voucher, token, stamp, coupon Accreditation References: EQuIP and other criteria and standards 1 Purpose This procedure describes the processes for Vouchers and Value Cards 2 Scope This procedure relates to GST implications and tax codes for Vouchers and Value Cards. 3 Supporting Documents References A New Tax System (Goods and Services Tax) Act 1999 Division 100 Vouchers Goods and Services Tax Ruling 2003/5: Vouchers (Consolidated with Addendum as of 10 Sept 2008) Other Related References CCH GST News Issue 5 dated 01/06/2005 paragraph 33 4 Consultation Key stakeholders (position and business area) who reviewed this version are: Manager, GST Team Principal Finance Officer, GST Team Senior Finance Officer, GST Team Assistant Finance Officer, GST Team Version No.: 3.0; Effective From: 7/9/2009 Page 1 of 6

2 Content Vouchers & Value Cards...1 Introduction...3 Summary of Tax Codes...3 Stored Value Cards...4 Translink Go Cards...5 Face Value Vouchers...5 Redemption of Face Value Vouchers...6 Version Control Version No Date Author/Reviewer Version No Date Author/Reviewer 1 28/09/2005 Colleen Horrobin /02/2009 Shayari Singh 2 27/03/2007 Colleen Horrobin 3 7/9/2009 Richard Baker /11/2007 Natasha McCarthy /09/2008 Eman Ajaj Version No.: 3; Effective From: 7/9/2009 Page 2 of 6

3 Introduction A voucher evidences a right or entitlement to receive/redeem supplies in the future. There are two transactions involved with a voucher: The The supply of the voucher itself; and redemption of the voucher for supplies. A supply of a voucher will be a taxable supply where the requirements of section 9-5 of the GST Act are met. The meaning of a voucher is provided under section of the GST Act. However, Division 100 will be applicable where the voucher also satisfies the requirements under Sec This means the purchase of these vouchers (Face Value Vouchers) will not be a taxable supply. GST will only be payable by the supplier of the supplies on redemption of the Face Value Vouchers (FVV) rather than on the supply (where those supplies are taxable supplies). A FVV is distinguished from a Stored Value Voucher which does not satisfy the two sections mentioned above and GST is applicable upon the purchase of a Stored Value Card. Summary of Tax Codes Description Original Purchase of Stored Value Card or Face Value Voucher Stored Value Card e.g. Mobil Prepaid Card, Toll Card, Power Card (tax invoice is required unless under $82.50 GST inclusive) Stored Value Card (if no tax invoice and greater than $82.50 GST inclusive) Face Value Voucher e.g. Gift voucher from a department store Redemption of Face Value Voucher Redeemed for a taxable supply (tax invoice is required unless under $82.50 GST inclusive) Redeemed for a taxable supply and no tax invoice received (where greater than $82.50 GST inclusive) Redeemed for a GST-free supply Redeemed for an item/service used in residential staff accommodation which includes GST Tax Code Purchases P0 P2 P5 P0 P2 P5 P1 Section Section (GST Act), provides the meaning of a voucher and a prepaid phone card or facility: (1) A voucher is any: (a) voucher, token, stamp (excluding postage stamps), coupon, or similar article; or (b) prepaid phone card or facility. The redemption of which in accordance with its terms entitles the holder to receive supplies in accordance with its terms. (2) A prepaid phone card or facility is any article or facility supplied for the primary purpose of enabling the holder: Version No.: 3; Effective From: 7/9/2009 Page 3 of 6

4 Section Queensland Health Procedure: Vouchers & Value Cards (a) To use, on a prepaid basis, telephone or like services supplied by a supplier of telecommunications supplies; or (b) To make, on a prepaid basis, acquisitions that are facilitated by using telephone or like services supplied by such a supplier. 1 Section lists additional requirements for vouchers and their consequences 2 : (1) the supply of the voucher must be an otherwise taxable supply (2) only the holder of the invoice is entitled to redeem the voucher (3) upon redemption the voucher must entitle the holder to receive a reasonable choice and flexibility of supplies (4) the voucher must have a stated monetary value (5) on redemption of the voucher, the holder is entitled to supplies up to the stated monetary value. A voucher which satisfies both these sections is referred to as a Face Value Voucher (FVV). A Face Value Voucher is not a taxable supply until it is redeemed. A FVV is distinguished from a Stored Value Voucher which does not satisfy the two sections mentioned above and GST is applicable upon the purchase of a Stored Value Card. Stored Value Cards Stored value cards include any cards t hat can be purchased to a giv en value an d subsequently be used over time to obtain supplies or services of a specific nature. GST will be applicable upon purchas e of the c ard rather than at the time of consuming t he service. Examples include: Tollcards issued by Queensland Motorways for the Gateway Bridge or other toll roads; Go Cards issued by TransLink Mobile Prepaid card; Bus Tickets; Airline Tickets; Prepaid Parking Voucher; Photocopying Cards; Power Cards; and A tax invoice must be obtained for purchases (greater than $82.50 inc. GST) of stored value cards prior to payment. Queensland Health (QH) will require a tax invoice at the time of purchase. The tax code to use where a valid tax invoice for taxable supplies is received would be: P0 10% GST 1 GSTR 2003/5: Vouchers, P 3 2 GSTR 2003/5: Vouchers, P 11 Version No.: 3; Effective From: 7/9/2009 Page 4 of 6

5 Translink Go Cards Please note that Translink (Qld Govt Entity) have indicated that they will not be issuing a compliant tax invoice when customers add credit to their Go Cards. Their reasoning is that all journeys available to be purchased are less than $ so therefore a compliant t ax invoice is not required. Please ensure that when Go Cards are charged that no more than $82.50 is in credit is added to the card in a si ngle transaction. The tax code to use would be: P0 10% GST < $82.50 P0 10% GST > $82.50 with compliant tax invoice P2 10% GST > $82.50 with non compliant invoice Face Value Vouchers 3 Vouchers that can be redeemed for goods and/or services up to a monetary value stated on the voucher (face value) are covered under subsections and of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). The purchase of these vouchers is not a taxable supply. GST is payable by the supplier of the supplies made on redemption of the FVV, if those supplies are taxable supplies. Hence, Qld Health will be able to claim an input tax credit where the FVV is redeemed / used for the purchase of a taxable supply and a valid tax invoice is received. Example Hans is given a gift voucher from QH in recognition of his voluntary services. The voucher states that he is entitled to goods or services to the value of $50, the amount being clearly indicated on the voucher. The store from where the voucher was purchased offers a range of goods (e.g. clothes, toiletries, Manchester etc.) which are of different values, as well as massage treatments, hairdressing and carpet cleaning. Hans may use the voucher to purchase any of the services or goods or any combination of them up to the monetary value of his voucher. The GST is not payable until the services are redeemed. Under the rules set out in Division 100 of the GST Act, the initial supply of the FVV is not a taxable supply, and th erefore is GST Free an d no input tax credits apply. The tax code used to purchase the voucher is: P5 No GST in the Price However, GST applies if and when the voucher is redeemed and the relevant goods/services are supplied and constitute a taxable supply. Note: All prepaid phon e products are eligible vouchers under Division (1) applied when the prepaid phone product is put into use. 1 and GST is 3 GSTR 2003/5: Vouchers, P 2-3 Version No.: 3; Effective From: 7/9/2009 Page 5 of 6

6 Redemption of Face Value Vouchers 4 GST will be payable on a taxable supply ma de on redemption of a FVV. The consideration provided for this supply, will be th e stated monetary value of the voucher and any additio nal consideration provided. The tax code to be used for the redemption of the voucher is: Description Redeemed for a taxable supply (tax invoice is required unless under $82.50 GST inclusive) Redeemed for a taxable supply and no tax invoice received (where greater than $82.50 GST inclusive) Redeemed for a GST-free supply Redeemed for an item/service used in residential staff accommodation which includes GST Tax Code Purchases P0 P2 P5 P1 Therefore, the relevant accounting entries for the purchase and redemption of a FVV are: DR xxxx P5 CR Bank - Purchase of the FVV DR Expense P0/P2/P5/P1 CR xxxx P5 Redemption of the FVV For the latest version of this GST Business Procedure, check the GST site on QHEPS: DISCLAIMER: This procedure is written in accordance with A New Tax System (Goods and Services Tax) Act For further information regarding Queensland Health policies and procedures, the appropriate resources should be researched and/or contacted. 4 GSTR 2003/5: Vouchers, P 2 Version No.: 3; Effective From: 7/9/2009 Page 6 of 6