According to Article 17 (4) (1) of the VAT Law, the base does not include discounts and other reductions in the price, which are granted to the recipient of goods or services at the time of the turnover of goods or services.
In the case of a loyalty program that implies that the payer does not charge redeemed points from a third party, the acceptance of points as a “means of payment” essentially has the character of granting a discount, since the purchased good customer pays a smaller amount for the value of the redeemed points. Accordingly, the VAT liability should be less by the amount of VAT contained in the value of the redeemed vouchers, that is, the VAT base should not include the “value of redeemed points”. However, for the exercise of this right there are, first of all, certain technical obstacles.
That is, consumers can purchase goods in outlets, the turnover of which is taxed at the general and special VAT rate. In the case where the same fiscal account shows the value of goods whose turnover is taxed at the general rate of VAT and the value of goods whose turnover is taxed at the special rate of VAT, in order to determine the reduction of the taxable base, it would be necessary to determine the proportion of the share of one and the other goods in the discount obtained. The essence is that the amount of the discount obtained should be distributed among the items whose turnover is carried out and the VAT base should be determined in the amount less the discount obtained per item.
An additional problem of a technical nature concerns the case when the buyer pays the purchased goods in full with accumulated points (if such a possibility exists). In that case, the taxable person would be obliged to calculate the VAT on the basis established in accordance with Article 18 (1). 1. and 3. Law on VAT.
Seen from the point of view of tax regulations, it is not necessary to have a decision or solution. It is customary for the terms of the loyalty program to be publicly available.
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