Loyalty Points and VAT: Voucher or Discount?

The CJEU case Lyko Operations AB examined whether loyalty points in a customer rewards program count as vouchers for VAT purposes.
The Court found they do not, because the points could not be used independently, were not transferable or redeemable for cash, and were only usable together with another purchase.
Instead, the points were treated as a bonus linked to a future purchase, not as payment or part-payment for specific goods or services.
Therefore, the special VAT rules for single-purpose or multi-purpose vouchers do not apply to this kind of loyalty point scheme.
The ruling matters for retailers and e-commerce businesses, and shows that VAT treatment depends on the exact design of the loyalty program.

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.