If your business sells gift vouchers, there are some key differences in your Goods and Services Tax (GST) payment and reporting requirements.
Unlike the sale of other goods and services, special tax rules allow you to delay the reporting and payment of GST (in some circumstances) to when the voucher is redeemed, rather than being required when the voucher is sold.
Your GST reporting and payment can be deferred in situations where the voucher will not be redeemed for a specific product of service.
Confused? Don’t be! We’ve put together these handy tips to help guide you to understand your GST payment and reporting requirements when it comes to gift vouchers.
GST for gift vouchers on ‘specified supply’ items
If the gift voucher is for a ‘specified supply’ product or service that includes GST, the purchase is GST-reportable and payable in the period in which the voucher is sold.
For example, if a customer buys a voucher for a weekend away at a health retreat, assuming the health retreat reports GST quarterly, the sale of this voucher will be reported in the business activity statement (BAS) for the quarter in which the voucher is purchased.
GST for gift vouchers on unknown or ‘mixed supply’ items
If the gift voucher is not for a ‘specified supply’ product or service, your reporting and payment of GST for the sale of gift vouchers should take place when the voucher is redeemed by the customer.
This is because the goods being exchanged for the voucher can only be identified at the time the voucher is redeemed.
For example, a voucher might be used to purchase a ‘mixed supply’ of products or services that contains some goods that attract GST and others that don’t (eg; a hamper with GST-free items such as coffee and jams as well as taxable items such as soft toys or crockery).
If a voucher is only partially redeemed, you’ll need to report the amount of the redeemed by the customer each time they use the gift voucher to make a purchase.
What happens when a voucher expires before redemption?
If the voucher expires before it’s redeemed, you’ll need to report the unredeemed amount as income and 1/11th (being the GST component) is reported and paid to the ATO.