Warsaw Court: Loyalty Program with Prepaid Cards and VAT Tax Base

• The case concerned a loyalty program using points converted into virtual prepaid cards, and whether this affected VAT taxable base.
• The tax authority said the points themselves do not reduce VAT at the time of the original sale, but the cards should be treated as multi-purpose vouchers (MPVs), so only the customer’s cash top-up counts toward the VAT base.
• The Warsaw Administrative Court upheld the result, but emphasized the program’s economic substance: it functioned mainly like a delayed, staged discount system.
• The court noted the virtual cards were not real money, could only be used within the company’s sales system, and served solely to reduce the price of future purchases.

Source: mddp.pl

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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