ECJ C-436/24 (Lyko Operations) – AG Opinion – VAT Treatment of Loyalty Program Points

On September 11, 2025, the ECJ issued the AG Opinion in the case C-436/24 (Lyko Operations).

Context: Request for a preliminary ruling – Tax law – Common system of value added tax (VAT) – Directive 2006/112/EC – Articles 30a and 30b – Definition of a voucher – Loyalty programme with points acquired on the basis of the price of purchases – Taxation of the issue of points – Taxation of the redemption of points – Taxation of expired points

Summary

Background of the Case: The case involves Lyko Operations AB’s customer loyalty program, where customers earn points based on their purchases that can be redeemed for goods in a subsequent transaction. The Swedish tax authorities questioned whether these points should be classified as vouchers under the VAT Directive.
Key Questions to the Court: The Högsta förvaltningsdomstolen (Supreme Administrative Court of Sweden) referred two questions to the Court of Justice:
- Do the points issued in the loyalty program constitute a voucher as defined in Article 30a of the VAT Directive?
- If so, how should the taxable amount be determined when these points are redeemed?
Decision of the Advocate General: Advocate General Kokott concluded that the points issued under Lyko’s loyalty program do not qualify as vouchers according to the VAT Directive. Instead, they should be regarded as a discount for future purchases.
Justification for the Decision: The Advocate General reasoned that the points do not create an obligation for Lyko to supply goods upon presentation of the points. Instead, they merely provide customers with a discount on a subsequent purchase, which is not sufficient to meet the definition of a voucher under the VAT Directive.
Implications for VAT Treatment: The opinion clarified that if the points are not redeemed, the full VAT applies to the initial purchase. The points do not create a separate taxable event; their value only comes into play upon redemption, aligning with the VAT Directive’s treatment of discounts.

Articles in the EU VAT Directive

Articles 30a and 73a of Directive 2006/112/EC

Article 30a
For the purposes of this Directive, the following definitions shall apply:
(1) ‘voucher’ means an instrument where there is an obligation to accept it as consideration or part consideration for a supply of goods or services and where the goods or services to be supplied or the identities of their potential suppliers are either indicated on the instrument itself or in related documentation, including the terms and conditions of use of such instrument;
(2) ‘single-purpose voucher’ means a voucher where the place of supply of the goods or services to which the voucher relates, and the VAT due on those goods or services, are known at the time of issue of the voucher;
(3) ‘multi-purpose voucher’ means a voucher, other than a single- purpose voucher.

Article 73a
Without prejudice to Article 73, the taxable amount of the supply of goods or services provided in respect of a multi-purpose voucher shall be equal to the consideration paid for the voucher or, in the absence of information on that consideration, the monetary value indicated on the multi-purpose voucher itself or in the related documentation, less the amount of VAT relating to the goods or services supplied.

Facts & Background

The Supreme Administrative Court wishes to clarify, by means of a preliminary ruling, how the definition of voucher in the VAT Directive is to be interpreted.

More specifically, the referring court wishes to clarify whether a customer’s right to obtain additional goods from a company under a customer loyalty programme, depending on the size of the purchases which the customer has made with the company, constitutes a voucher. If that right does constitute a voucher, the Supreme Administrative Court further wishes to clarify how the taxable amount is to be determined. The questions have arisen in a case concerning a tax ruling issued by the Skatterättsnämnden (Revenue Law Commission, Sweden) against which an appeal has been lodged.

Questions

Question 1: Does an instrument in the form of points – such as that at issue in the main proceedings – constitute a voucher as defined in Article 30a of the VAT Directive where the points are awarded under a customer loyalty programme designed in such a way that a customer who purchases goods obtains points according to the size of the purchases and is then entitled, when making a future purchase, to use the points to obtain further goods from the seller’s range?

Question 2: If the answer to Question 1 is [in the affirmative], how is the taxable amount under Article 73a of the VAT Directive to be determined when the points are used to obtain goods from the seller?

AG Opinion

The issue of points under a customer loyalty programme which is designed in such a way that a customer who purchases goods obtains points according to the size of the purchases and is then entitled, when making a future purchase, to use the points to obtain further goods from the seller’s range does not constitute a voucher within the meaning of Article 30a of Directive 2006/112. There is no (self-standing) obligation to accept those points as consideration for a supply of goods. Therefore, such a point system constitutes only a discount on a future purchase.

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