- South Korea’s Supreme Court held that discounts given when customers redeem loyalty points earned at other affiliates in a shared group program are price reductions, not taxable consideration.
- Such redeemed points must be excluded from the VAT base under the VAT Act, even if the merchant is later reimbursed through intercompany settlement.
- The Court voided the VAT enforcement decree provision to the extent it required third-party mileage-point reimbursements to be included in the supply value.
- The ruling upheld Lotte Station Building’s challenge to the tax office’s refusal to revise its VAT assessment on points redeemed at its stores from other Lotte affiliates’ programs.
Source: en.sedaily.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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