The EU Court of Justice clarified that loyalty points in the Lyko case are discounts, not vouchers, because they cannot be redeemed independently of a purchase. This means VAT is charged on the full price of the initial purchase, and redemption of points reduces the VAT base of the subsequent purchase, while unused points require no VAT adjustment. The ruling also indicates that loyalty schemes that allow independent payment are treated as vouchers, triggering VAT at redemption.
The CJEU ruled that Lyko's loyalty points are discounts, not vouchers, because they cannot be redeemed independently of a purchase.
Redemption of points is treated as a price reduction, lowering the VAT base of the subsequent purchase, while unused points do not trigger a VAT adjustment.
If points can be used as independent payment for goods or services, they are considered vouchers and VAT is triggered at the time of redemption.
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Riksdagen · 2 days ago
Sweden’s Riksdag approved a temporary reduction of the VAT rate on food from 12% to 6% effective 1 April 2026, lasting until 31 December 2027. The change aims to support household finances during the period.
VatCalc · 10 days ago
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LinkedIn Article by Bruno Gasparotto · 14 days ago
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VatCalc · 18 days ago
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VatCalc · 20 days ago
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The Invoicing Hub · 25 days ago
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