Single-Purpose and Multi-Purpose Gift Certificates

In accordance with an EU Directive, a distinction must be made between single-purpose and multi-purpose gift certificates. The two types have different consequences in terms of sales tax.

For single-purpose gift certificates, the gift certificate item and the location of tax liability are already fixed when the customer purchases the gift certificate. A gift certificate where this is not the case is a multi-purpose gift certificate.

The main difference between the two types of gift certificate is the time of taxation:

  • In the case of a single-purpose gift certificate, sales tax is payable immediately upon sale of the gift certificate, whereas in the case of a multi-purpose gift certificate, tax is due upon redemption.

  • The POS configuration determines whether gift certificates sold at the POS are single-purpose or multi-purpose: For single-purpose gift certificates, a gift certificate item must be pre-configured for all gift certificate functions.