What is the VAT Rate Charged on Gift Cards? (Business client)

Gift cards are VAT-free. This means that when you purchase a gift card from us, no VAT (Value Added Tax) is applied to the value of the card. The full amount you pay goes toward the gift card balance, which the recipient can use when redeeming it with their chosen brand.

Why is there no VAT?

Because a gift card is considered a payment instrument (not a product or service), VAT is not charged at the point of purchase. VAT may apply later, depending on what goods or services the recipient uses the card for, and is handled by the merchant at that stage.