What is a voucher
A voucher:
- is a token, stamp (not a postage stamp), coupon or similar article, such as a physical card or digital gift or retail store voucher, or a prepaid phone card or facility
- has a stated monetary value, which may be:
- on the voucher
- on documents accompanying the voucher
- a top up amount for a phone card
- redeemed for goods or services.
There are 2 types of vouchers:
- face value vouchers
- non-face value vouchers.
How GST applies to vouchers
The type of voucher you sell will determine when you should account for GST.
Face value vouchers
A face value voucher can be redeemed for a reasonable choice of goods and services.
For example, a $50 voucher issued by a supermarket that allows voucher holders to redeem products at any of its different stores is a face value voucher.
When selling a face value voucher, you only account for GST when the voucher is redeemed for taxable goods and services, not at the time when the voucher is sold. This is because the sale of a face value voucher for an amount not exceeding its face value is not a taxable supply.
If you sell a face value voucher for an amount exceeding its face value (such as selling a $100 voucher for $105), you need to account for GST on the amount exceeding the face value at the time when it's sold.
Example 1: accounting for GST on face value vouchers
SuperSupermarket sells a $20 gift card to Patti for $20. SuperSupermarket doesn't need to account for GST when the gift card is purchased as it is not a taxable supply.
Patti redeems the gift card for a non-stick frypan for $15 and a punnet of strawberries for $5 from SuperSupermarket.
SuperSupermarket reports GST on its supply of the frypan as it's a taxable supply. It doesn't report GST on the strawberries as they are GST-free.
End of exampleExpired or unredeemed face value vouchers
You will need to make an increasing adjustment on your business activity statement (BAS) when a face value voucher you've sold:
- has expired or has not been fully redeemed; and
- you have written back to current income any reserves for the redemption of the voucher for accounting purposes.
The increasing adjustment is 1/11th of the unredeemed balance. You report it at label 1A on your BAS.
For more information see GSTR 2003/5 Goods and services tax: vouchers.
Example 2: making an increasing adjustment for an unredeemed voucher
Coffee Cafe sells a $100 face value voucher to Adam in March 2024 for $100. The voucher is valid for 12 months from the date of issue.
Adam can redeem it for a range of goods sold by Coffee Cafe up to the amount stated on the voucher.
He redeemed the voucher for goods to a total cost of $67 before the voucher expired in March 2025. As the voucher has now expired, it has an unredeemed amount of $33.
In April 2025, Coffee Cafe writes back to current income the unused credit of $33. At this time, Coffee Cafe is required to make an increasing adjustment of $3 (GST of 1/11 x $33) on its BAS for this tax period.
End of exampleNon-face value vouchers
A non-face value voucher can only be redeemed for specific goods and services. For example, a $100 voucher for a facial treatment at a day spa.
You need to account for GST at the time you sell a non-face value voucher, but only if it is redeemable for taxable supplies.
You don't need to account for GST when the voucher is redeemable for input taxed or GST-free supplies.
Reporting voucher sales
Face value vouchers
If you sell a face value voucher, you don't account for the sale on your BAS until it's redeemed.
When it's redeemed in full for goods or services you sell, the payment for the sale is the stated monetary value of the voucher plus any additional payment received.
Non-face value vouchers
For a non-face value voucher, you account for the sale of it on your BAS in the reporting period when it's sold.
For more information see when and how to report and pay GST.
Claiming credits for purchases using vouchers
If you buy a voucher and use it to get something that is a taxable supply, you're entitled to claim a GST credit if that purchase is used in your business.
For a face value voucher, you claim GST credits in your BAS for the reporting period you redeem it, not the reporting period when you buy it.
For a non-face value voucher, you claim GST credits in your BAS for the reporting period when the voucher is bought.
You're not entitled to claim a GST credit for the purchase if it either:
- relates to making input taxed sales
- is of a private or domestic nature.