- The European Court of Justice (ECJ) was asked about the VAT situation regarding the supply of subscription gifts to new subscribers of consumer protection magazines.
- The ECJ determined that the provision of a subscription bonus is an ancillary service connected to the main service of supplying periodicals.
- The subscription gift, such as a tablet or smartphone, is given in exchange for taking out a subscription and is not considered a disposal of goods free of charge.
- The provision of subscription gifts is an integral part of the commercial strategy of the company and aims to increase the number of subscribers and improve profits.
- The gifts are subject to VAT at the standard rate.
- The decision does not specify whether the main service consists of print editions or digital editions of the magazine.
- It is unclear if a long-term subscription is a precondition for the supply of non-cash bonuses.
- There are no Supreme Tax Court judgments on this matter, and it is uncertain if future decisions would reach different conclusions.
- The Hamburg Tax Court previously ruled that the grant of premiums in kind upon subscription to a magazine is not a single service with the delivery of the magazine.
Source: blogs.pwc.de
See also: ECJ Case C‑505/22 (Deco Proteste)
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
