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Flashback on ECJ/CJEU cases – VAT treatment of payments in the course of operating loyalty reward programmes

Curia – C-53/09 & C-55/09  – Loyalty Management UK and Baxi Group

The ECJ held that the payments made by LMUK and Baxi to redeemers who supply loyalty rewards to customers must be regarded as “third party consideration” for a supply of goods or services to customers. This means that LMUK/ Baxi will not be able to recover the VAT unless it can show that there was a clear and separate service or supply that it was receiving. The ECJ stated this is a matter for the national courts.

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