ECJ Case: VAT Treatment of Loyalty Points vs Vouchers Under EU Directive

• The ECJ case involves Lyko Operations AB and the Swedish Tax Authority disputing whether customer loyalty points qualify as vouchers under EU VAT Directive rules
• The Attorney General examined two key conditions for voucher classification and found that while goods or supplier were identifiable, Lyko has no obligation to accept points as standalone consideration for goods
• The AG concluded that loyalty points only provide discounts on future purchases rather than creating independent payment obligations, meaning they do not meet voucher requirements
• The opinion suggests loyalty programs should be treated as discount mechanisms with taxable amounts reflecting only the actual price paid by customers during redemption
• While the AG opinion provides important interpretation, the final ECJ decision will determine whether this approach becomes binding across the EU for consistent loyalty program VAT treatment

Source: vatabout.com

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.

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