The EU VAT Treatment of Vouchers (FM nr. 157) 2019/3.8:3.8 Requirements for transactions to be subject to VAT derived from CJEU case law

The EU VAT Treatment of Vouchers (FM nr. 157) 2019/3.8

3.8 Requirements for transactions to be subject to VAT derived from CJEU case law

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The provisions in the EU VAT Directive under which certain transactions are deemed to be made for consideration, or not subject to VAT, are not the only source for this type of treatment of transactions. In this section, I will examine the relevant CJEU case law on this topic. Because this research focuses on the VAT treatment of voucher transactions, loyalty schemes and other incentives, I will only focus on cases where a taxable person acting as such supplies goods or services or makes an intra-Community acquisition for payment within the territory of a Member State. Based on CJEU case law, some specific situations exist in which no economic activities are performed, even though all the requirements that I just mentioned are met.

The following requirements have been developed by the CJEU:

a)

there has to be consumption;1 and

b)

the transaction should not be subject to a total legal prohibition on importation and marketing in the EU;2and

c)

transactions should not be effected within the same legal entity, e.g. between a head office and its branch, and

d)

they should not qualify as certain specific transactions concerning contractually agreed shares.3

I will elaborate in this now.

3.8.1 No consumption, no taxation3.8.2 A total legal prohibition on importation and marketing in the EU3.8.3 Transactions within the same legal entity3.8.4 Some specific contractually agreed shares

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