- The Court of Justice of the European Union (ECJ) has clarified how VAT applies to free supplies of goods or services made by businesses.
- This clarification is important because EU Member States have different rules and approaches to promotional giveaways for VAT purposes.
- The recent ECJ decision in Case C-505/22 (Deco Proteste – Editores) provides a solid basis to challenge any practices and VAT laws that are not in line with EU VAT principles.
- The case involved a Portuguese company, Deco Proteste – Editores, which offers gifts to new subscribers as part of its promotional campaign.
- The Portuguese tax authorities considered these gifts to be free supplies of goods and subjected them to VAT.
- However, the ECJ ruled that the gifts were ancillary to the main supply of subscriptions and should not be seen as supplied free of charge.
Source Grant Thornton
See also
- ECJ C-505/22 (Deco Proteste – Editores, Lda) – Judgment – A gift for a subscription is not a free transfer of goods and is ”incidental service” to the main supply
- Summary of the ECJ Case C-505/22: A subscription gift in exchange for a periodical subscription is considered an ancillary supply
- Roadtrip through ECJ Cases – Focus on ”Free Products” (Art. 16)
- Join the Linkedin Group on ECJ VAT Cases, click HERE
- VATupdate.com – Your FREE source of information on ECJ VAT Cases
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