If your business sells or accepts vouchers, it’s important to understand how GST (Goods and Services Tax) applies. The ATO outlines clear rules depending on the type of voucher involved. Here’s a simple breakdown to help you stay compliant.
What Is a Voucher?
A voucher is a token, coupon, gift card, or similar item—either physical or digital—that has a stated monetary value and can be redeemed for goods or services.
Types of Vouchers
There are two main types:
– Face Value Vouchers: Can be used for a wide range of goods or services (e.g., a $50 supermarket gift card).
– Non-Face Value Vouchers: Redeemable only for specific goods or services (e.g., a $100 voucher for a facial at a day spa).
How GST Applies
– Face Value Vouchers: GST is only accounted for when the voucher is redeemed, not when it’s sold—unless sold for more than its face value.
– Non-Face Value Vouchers: GST must be reported at the time of sale, but only if the voucher is for taxable goods or services.
Unredeemed Vouchers
If a face value voucher expires or isn’t fully used, and you write back the unused amount to income, you must make an increasing adjustment on your BAS. This is calculated as 1/11th of the unredeemed balance.
Reporting on Your BAS
– Face Value Vouchers: Report GST when the voucher is redeemed.
– Non-Face Value Vouchers: Report GST in the period the voucher is sold.
Claiming GST Credits
If you use a voucher to buy taxable goods or services for your business:
– Face Value Voucher: Claim the GST credit when you redeem it.
– Non-Face Value Voucher: Claim the GST credit when you buy it.
Note: No GST credit can be claimed if the purchase is for private use or relates to input-taxed sales.
Need Help Navigating these Rules?
If you’re an SME and need help navigating these rules, Contact us today to book your consultation.
More information can be found on the ATO website.
The team at EMspire Advisory are trusted, qualified Chartered Accountants, tax agents, and small business accountants. We work closely with our clients to achieve the best possible outcomes. To find out more, please contact us!
Please note that this information is not specific and is general in nature and cannot be relied on as advice. Please contact us for advice specific to you and your circumstances.