Selling gift cards is a powerful commercial driver for French businesses, potentially leading to significant additional sales revenue. In 2025, the French gift card market was €8.6 billion. There are numerous advantages for businesses, including immediate income, acquisition of new customers, customer retention, and increased cart averages.

However, selling gift cards involves managing value-added tax (VAT), and it’s important to clearly understand the rules to avoid billing errors and the risk of reassessment. Since 2019, French law has recognized two categories of gift cards: single-purpose vouchers (SPVs) and multipurpose vouchers (MPVs). Each is subject to a specific VAT regime.

This article explains how to apply VAT based on the gift card type, bill it, account for it, and report it.

Key takeaways:

• A gift card is a physical or digital voucher issued for consideration and usable in exchange for the delivery of goods or services.
  
• Gift cards fall into two categories: SPVs, where the VAT rate and place of purchase are known when the business sells the card, and MPVs, where at least one of those details remains unknown.
  
• VAT is due for an SPV at the time the card is sold, at the rate corresponding to the underlying good or service. VAT is due for an MPV at the time the card is actually used, at the rate applicable to the good or service ultimately provided.
  
• If a customer never uses an MPV, the business owes no VAT and can keep the amount collected without VAT applying.
  

What is a gift card?

A gift card is a physical or digital instrument sold by a business that the beneficiary can use to obtain goods or services from the issuer or its partners. Customers can use a gift card as an alternative payment method, with a predetermined credit value toward a purchase.

Article 256 ter, Paragraph 3a of the General Tax Code (CGI) defines gift cards as “vouchers.” According to the tax office, such an instrument is a voucher if it meets three conditions:

• It is provided to its beneficiary for use as payment by the issuer or by a third party (e.g., intermediary, distributor).
  
• The recipient must accept it as full or partial payment for one or more deliveries of goods or services.
  
• The relevant goods or services are indicated either on the instrument itself or on corresponding documentation, such as the general terms and conditions of sale or use.
  

Therefore, instruments provided free of charge, such as restaurant meal vouchers, holiday vouchers, universal service employment vouchers, and postage stamps, are not considered vouchers for tax purposes. They fall under a specific tax regime.

What are the different types of gift cards?

Following the transposition of European Directive (EU) 2016/1065 into national law, French law recognizes two categories of gift cards: SPVs and MPVs.

SPVs

The type, country of delivery for goods or services, and the amount of VAT due (tax base, rate, place of taxation) are known for SPVs at issuance.

This applies, for example, to:

• A gift card for use in a French restaurant chain that exclusively serves food on-site
  
• A card providing access to a set number of viewings at one movie theater location
  
• A gift card valid at a network of retail stores in France that sell items subject to the same VAT rate
  

These cards qualify as SPVs because issuing them establishes the place of use and the VAT rate.

MPVs

MPVs differ from SPVs because, at the time of issuance, at least one taxation element—such as the VAT rate, place of use, or specific type of good or service—has not yet been determined.

This applies, for example, to:

• A gift card valid at a brand that sells products subject to the usual VAT rate (20%) and products subject to a reduced rate (5.5% or 10%). For instance, French retail chain Fnac sells books, event tickets, CDs, and DVDs.
  
• Gift boxes such as Smartbox or Wonderbox, which can be used in multiple European Union countries and provide access to different types of services (e.g., wellness, leisure).
  

What VAT applies to gift cards?

For SPVs, VAT is due when the gift card is sold, at the rate applicable to the underlying good or service. For MPVs, VAT is not charged at the time of sale and is payable at the point the beneficiary uses the gift card to purchase goods or services.

This application follows the VAT due date principle, which determines when the government can legally require VAT payment. If not all elements required to liquidate the VAT (rate, tax base, location) are known, the transaction cannot be taxed.

VAT on SPVs

SPVs are subject to strict regulation: VAT is payable when a voucher is sold, at the rate applicable to the good or service it entitles the holder to access. Furthermore, each transfer after the voucher is issued (e.g., sale to a distributor or resale by an intermediary) is also taxable (Article 269 of the CGI). When the beneficiary uses the voucher, the physical delivery of the product or the provision of the service is not considered a separate transaction. It does not trigger a new VAT invoice.

For instance, a restaurant manager sells a €100 tax-inclusive gift card, usable exclusively at their restaurant in Paris. The seller immediately collects VAT at the 10% rate (the rate applicable to the onsite restaurant industry) and remits it to the government with their next VAT return.

VAT on MPV gift cards

Under Article 256 ter, Paragraph 2 of the CGI, the sale or transfer of MPVs before their use is not liable for VAT. Taxation occurs at the time of the physical delivery of goods or performance of services. The sale of a gift card does not trigger VAT collection, and the seller does not record the VAT received as sales revenue at that stage.

VAT becomes due when the gift card is used, at the rate that applies to the good or service at the time of delivery. For goods, VAT becomes payable when the seller accepts the voucher. For services, VAT becomes payable upon payment receipt, unless the “VAT debit” option applies, in which case VAT becomes due as soon as the invoice is sent.

Note: The commission earned by an intermediary distributor of an MPV, representing the difference between the purchase price and the resale price, is subject to VAT under standard rules, as a distribution service.

When an MPV remains unused (around 20% of issued cards are never redeemed), no VAT becomes due. The business definitely retains the sum received without falling within any VAT taxable base, and there is no VAT liability linked to the physical delivery of goods or the actual performance of services.

How is VAT billed on gift cards?

VAT invoicing differs depending on whether it is related to the sale of an SPV or an MPV. For an SPV, the business issues a bill that notes the applicable VAT rate. For an MPV card, the document provided must not display VAT.

SPV VAT billing

The bill, or detailed sales receipt, has to contain all required information, including the amount exclusive of tax, the VAT rate and amount, and the sum inclusive of tax.

MPV VAT billing

According to the Official Bulletin of Public Finances (BOFiP), any document issued upon delivery of an MPV must not include the VAT billed. The bill or receipt provided must state the total sum collected, inclusive of VAT, and, preferably, the note “Transaction outside VAT scope” (Opération hors champ de la TVA).

It is upon use of the gift card that the business can issue a bill or receipt with VAT at the applicable rate for the goods or services sold.

Accounting for gift card VAT

Accounting treatment needs to accurately reflect the transaction type. Companies treat an SPV as an immediate sale and collect VAT at that point. For an MPV, payment is recorded as a customer liability, while revenue and VAT are recognized when the voucher is redeemed.

• SPVs
  When a business sells an SPV, it must record the VAT in account 44571 “VAT Collected” and include it in its next tax return. The product or service associated with the card is recorded before tax in account 707 “Sales of Goods” or account 706 “Provision of Services.”

• MPVs
  The sale of an MPV does not trigger VAT recording. Instead, the seller records the payment as a receipt tied to a commitment to provide a good or service at a later date. When the customer redeems the card, the seller records VAT in account 44571. The related goods or services are initially recorded in account 4191, “Customers - Advances and deposits received on orders,” and later transferred to accounts 706 or 707 when the customer redeems the card.

Reporting gift card VAT

VAT gift card reporting follows tax liability rules:

• Businesses declare VAT collected for SPVs using forms CA3 or CA12 in the month or quarter when the sale takes place.
  
• VAT collected for the use of MPVs is included in the reporting for the period during which the holder exchanges the card for a good or service.
  

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