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Comments on ECJ C-436/24 (Lyko) – Loyalty programs and VAT: AG’s opinion in Lyko case brings new perspectives

Briefing document & Podcast: ECJ C-436/24 (Lyko) VAT on Loyalty Programs

 


  • Loyalty Points as Discounts: Advocate-General Kokott’s opinion in the Lyko case suggests that loyalty points should be considered discounts rather than vouchers, as they require a future purchase for redemption, implying that they do not create an independent obligation for the supplier to provide goods.
  • Taxable Amount Clarification: The AG stated that if loyalty points do not qualify as vouchers, the only taxable amount to consider upon redemption is the price paid by the customer during the subsequent purchase, rather than the value of the points themselves.
  • Implications for Loyalty Programs: This opinion clarifies uncertainties surrounding loyalty programs and VAT, indicating that loyalty points tied to future purchases do not constitute vouchers and emphasizing the need for businesses to review their loyalty program structures in light of potential VAT implications.

Source Deloitte


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