Accounting for vouchers: how should Swiss companies handle VAT and bookkeeping?
Vouchers can be used to reward customers or as giveaways for marketing purposes. It is important for companies who regularly use vouchers to understand their correct accounting and VAT treatment, as well as the legal validity and expiry of vouchers.
This guide explains the distinction between value and service vouchers, their VAT treatment, limitation periods under Swiss law, and the financial impact of unredeemed vouchers.
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Book a callHighlights
- Vouchers enhance seller liquidity, creating upfront revenue without product exchange
- The accounting and VAT treatment of a voucher depends on whether it is a value or service voucher
- Unredeemed vouchers become “slumber money“, pure profit after expiry
- 2021 court ruling means VAT on service vouchers is now due at sale, not redemption
- Voucher validity spans 5 or 10 years, depending on the underlying claim (Art. 127–128 CO)
Content
- Accounting for vouchers: how should Swiss companies handle VAT and bookkeeping?
- Highlights & content
- Why are vouchers such powerful instruments for customer loyalty?
- What is the distinction between value and service vouchers?
- How does VAT apply to vouchers in Switzerland?
- How should vouchers be recorded in accounting?
- How long are vouchers valid in Switzerland?
- Get expert help with voucher accounting from Nexova
- FAQ
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Why are vouchers such powerful instruments for customer loyalty?
Vouchers are one of the most effective customer loyalty tools available to Swiss businesses. They generate immediate cash flow, reduce product returns, and encourage higher spending. Additionally, a portion of vouchers are never redeemed at all, creating pure profit for the issuer.
Vouchers have become increasingly popular in recent years and represent a growing market. According to Research and Markets, the Swiss gift card and voucher market was valued at approximately USD 1.76 billion in 2024 and is forecast to reach USD 2.48 billion by 2029, growing at a CAGR of 6.9%. They are valuable tools for customer loyalty that offer businesses numerous advantages. But what makes vouchers special, and why have they become so popular?
Earlier liquidity through pre-financing
An important advantage of vouchers is that they enable earlier liquidity for the seller, as they are only redeemed later. Vouchers that are sold generate immediate revenue without needing to provide anything in return at that point.
Fewer exchanges
Many vouchers are bought as gifts, as they make it easier to avoid giving the ‘wrong’ thing and are easier and simpler for the gifter. This effect is advantageous for retailers: due to the free choice for the recipient of the voucher, there are fewer product exchanges, which saves the retailer time and costs.
Increased willingness to buy
Vouchers also have a purely psychological effect: the voucher recipient becomes increasingly willing to spend more since they feel they do not have to pay for the product themself. In many cases, they may even spend more than the value of the voucher, as the additional difference feels like little compared with the total cost.
“Slumber money” potential
There will always be a proportion of vouchers that are never redeemed, the effects of which should not be underestimated. This “dormant money” is highly profitable for businesses and should also be accounted for. According to US industry data, between 10% and 19% of gift card balances remain unredeemed at any given time, and roughly 6% are never used at all. The situation is likely similar in Switzerland.
This must be taken into account in the bookkeeping, as according to the Code of Obligations, the amount of unredeemed vouchers may only be booked as income after the expiry of the limitation period. Until then, unredeemed vouchers must be carried as liabilities on the balance sheet.
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Book a callWhat is the distinction between value and service vouchers?
Swiss VAT law distinguishes between value vouchers (redeemable for unspecified goods or services) and service vouchers (tied to a specific, pre-defined service). This distinction, established by a Federal Administrative Court ruling in August 2021 (case A-2587/2020), determines when VAT becomes due.
Until August 2021, sales of vouchers had no VAT implications. Vouchers were considered an exchange of means of payment, and no exchange of services was seen to be involved.
However, since August 2021, the Federal Administrative Court has revised the case law on the treatment of vouchers (judgment of 10 August 2021, A-2587/2020) and introduced a differentiated treatment between vouchers of value and vouchers for services.
Vouchers of value: unchanged VAT treatment
Vouchers of value give the holder the right to receive goods or services from the supplier for a certain value. The VAT treatment of value vouchers remains unchanged: no VAT is due at the time of sale and the tax liability only arises when the voucher is redeemed. Value vouchers do not bear any reference to VAT and if a value voucher is not redeemed, the business can account for the amount without incurring VAT.
Service vouchers: new rules
Service vouchers are those where the service is already defined at the time of sale. Service vouchers are considered an advance payment for a specific service; therefore, VAT accrues at the time of purchase.
The VAT must be shown on receipts for service vouchers. If a service voucher is not redeemed, the business can account for the money, but the VAT already accounted for must be reclaimed from the tax administration.
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Book a callHow does VAT apply to vouchers in Switzerland?
The VAT treatment depends entirely on the voucher type. For value vouchers, VAT is due only at redemption. For service vouchers, VAT is due at the point of sale because the payment is treated as an advance for a specific, pre-defined service.
The VAT liability in the case of a value voucher only takes place when it is used or redeemed. Therefore, the VAT must only be accounted for at the time the service is received or the voucher is redeemed.
In contrast, the sale of service vouchers is an advance payment for a specific service. Therefore, the tax liability arises at the time the voucher is issued for the specific service or when the payment for the voucher is received.
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Book a callHow should vouchers be recorded in accounting?
Value vouchers and service vouchers require different accounting treatment because of their distinct VAT timing. The key difference is whether VAT is recorded at the point of sale or at redemption, and what happens if the voucher expires unused.
Accounting of value vouchers
Value vouchers are an instrument that gives the holder the right to receive goods or services of their choice from the supplier, up to a specified monetary amount. the VAT-relevant exchange of services only takes place when the voucher is redeemed. In the case of a voucher of value, the VAT-relevant exchange of services only takes place when the voucher is redeemed. Therefore, VAT is only to be accounted for at the time the voucher is redeemed.
Example calculation:
- A wellness resort sells a voucher for CHF 300.00, redeemable for any treatments or services, in October 2024.
- The account “Cash / Voucher” is increased by CHF 300.00.
- The voucher is redeemed in April 2026.
- The account “Voucher / Revenue” is increased by CHF 277.52 and the account “Voucher / Output VAT” is increased by CHF 22.48. (Based on the current standard VAT rate of 8.1%.)
- If the voucher is not redeemed and expires, the account “Voucher / extraordinary income” is to be increased by CHF 300.00.
Accounting for service vouchers
In contrast, service vouchers are already specifically defined at the time of purchase. The sale of service vouchers therefore represents an advance payment for a specific service. VAT is already incurred when the voucher is handed over and not only when it is redeemed.
Example calculation:
- A wellness resort sells a voucher for a massage for two persons (value CHF 300.00) in October 2024.
- The account “Cash / Advance payments” is increased by CHF 277.52 and the account “Cash / Output VAT” is increased by CHF 22.48. (Based on the current standard VAT rate of 8.1% as of 2026.)
- In April 2026, the voucher is redeemed and the account “Down payments / Revenue” is increased by CHF 277.52.
- If the voucher is not redeemed and expires, the account “Down payments / extraordinary income” must be increased by CHF 277.52 and also the account “Output VAT / extraordinary income” by CHF 22.48.
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Book a callHow long are vouchers valid in Switzerland?
Under Swiss law, voucher validity is governed by the general limitation periods in the Code of Obligations. Vouchers for everyday goods and services (e.g. restaurant meals, retail purchases) are subject to a five-year limitation period, while those for larger services (e.g. hotel stays, travel) are valid for ten years.
Those who own a voucher usually want to have as long as possible to redeem it. But how long is a voucher valid? The type of voucher determines its characteristics.
According to the law, vouchers for smaller servicessuch as books, food, clothes or restaurant visits expire after 5 years. (Art. 128 CO).
For larger services such as a weekend in a hotel or a trip, the law provides for a limitation period of 10 years. (Art. 127 CO).
Art. 129 CO prohibits the contractual shortening of these statutory limitation periods, so any expiry date printed on a voucher that is shorter than the legal minimum may not be enforceable.
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Book a callGet expert help with voucher accounting from Nexova
Vouchers have become a growing market in recent years and a valuable tool for customer loyalty. They offer businesses earlier liquidity, fewer product returns and an increased propensity to buy. In addition, a portion of vouchers will inevitably go unredeemed, representing pure profit once the limitation period expires, though businesses must ensure these are correctly accounted for in the balance sheet and income statement.
In August 2021, the Federal Administrative Court revised the case law on the treatment of vouchers and introduced a distinction between value and service vouchers. Value vouchers are unchanged for tax purposes and service vouchers have new rules. This distinction has implications for VAT and the accounting treatment of vouchers.
If you are unsure how to account for vouchers in your company, we Nexova’s accounting services can help you get it right. From correct VAT treatment to year-end closing entries for unredeemed vouchers, we ensure your books are accurate and compliant.
FAQ
Answers at a click
What is the difference between a value voucher and a service voucher for VAT purposes?
A value voucher can be redeemed for unspecified goods or services up to a certain amount, and so VAT is only due when the voucher is redeemed. A service voucher (sometimes called a benefit or performance voucher) is tied to a specific, pre-defined service (e.g. a spa treatment for two), and therefore VAT is due at the point of sale because it is treated as an advance payment.
When did the VAT rules for vouchers change in Switzerland?
In August 2021, the Federal Administrative Court issued a ruling (A-2587/2020) that introduced a formal distinction between value and service vouchers for VAT purposes. Before this ruling, all vouchers were treated as means of payment with no VAT implications at the time of sale.
How long is a voucher valid in Switzerland?
Under the Swiss Code of Obligations, vouchers for everyday goods and services (food, clothing, restaurant meals) are subject to a five-year limitation period (Art. 128 CO). Vouchers for larger services such as hotel stays or travel are valid for ten years (Art. 127 CO). These statutory periods cannot be shortened by contract (Art. 129 CO).
What happens to unredeemed vouchers in accounting?
Unredeemed vouchers remain as liabilities on the balance sheet until the statutory limitation period expires. Once expired, the amount can be reclassified as extraordinary income in the annual financial statements. For value vouchers, no VAT adjustment is needed. For service vouchers, the VAT already remitted must be reclaimed from the Federal Tax Administration.
Do I need to show VAT on a voucher receipt?
Only for service vouchers. Because VAT is due at the point of sale for service vouchers, the receipt must show the applicable VAT. Value voucher receipts do not need to reference VAT, as the tax only becomes relevant when the voucher is redeemed.
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