The entities in group X formed a VAT group. The entities carried out both taxable as well as exempt financial and insurance services. Group X’s customers received bonuses based on their banking and insurance activities, the amount of which was based on the amount of banking and insurance activities of the group as a whole. The bonuses accrued by the customers were used to purchase services from Group X. In addition to banking and insurance premiums, the bonuses could be used for services subject to VAT. Group X decided on which services the bonuses could be used for and automatically debited the bonuses from the customer’s bonus account. The bonuses were used without any choice by the customer.
The issue was whether the VAT group was liable to pay tax on its own use of the service under Article 22(1)(1) of the VAT Code when Group X supplied its customers with VAT-taxable services which it provided itself in return for bonuses, the bonuses covering the full price of the service.
The purpose of the bonus scheme and the related supply of services in return for bonuses was to promote the business of the taxable group as a whole. To the extent that the bonuses were used for taxable services within the meaning of the VAT Act, they were mainly in the form of a rebate, since the bonus accrued per customer was generally insufficient to cover the full cost of the service. The bonus scheme may also encourage taxable sales by a group of taxable persons, even if the accrued bonuses were sufficient to cover the full price of a single taxable service under VAT law.
In view of the partially tax-inducing purpose of the bonus scheme and the use of bonuses and the fact that Article 22(1)(1) of the VAT Code or Article 26(1)(b) of the VAT Directive only applies to the supply of services for non-business purposes or for purposes other than those of the business itself, the taxable group was not liable to own-use tax on those supplies of services.
Decision of the Tax Administration for the financial period 1 January to 31 December 2017 not to impose VAT.
Section 1 (1) (1), Section 13a (1), Section 20 and Section 22 of the VAT Act
Council Directive 2006/112 / EC on the common system of value added tax Articles 2 (1) (c) and 26
Source: kho.fi
