The judgment of the Court of Justice of the European Union of 5 March 2026 in case C-436/24 concerns the tax classification of points awarded to customers under loyalty programs.
The dispute arose in the context of a Swedish loyalty scheme in which customers received points proportional to the value of their purchases and could later redeem them for low-value goods in subsequent transactions. The key issue was whether such points could be regarded as “vouchers” within the meaning of Article 30a of the VAT Directive, which would determine their VAT treatment and potentially trigger the application of Article 73a governing the taxable amount for multi-purpose vouchers.
The Court indicated that the correct interpretation of Article 30a(1) of the VAT Directive requires that two conditions be met cumulatively. First, the instrument must be linked to an obligation to accept it as consideration or part of the consideration for a supply of goods or services. Second, the goods or services to be supplied, or the identity of the supplier, must be specified either on the instrument itself or in related documentation. The essence of a “voucher” is therefore its payment function—it must replace money, in whole or in part. This criterion is reinforced by the recitals of Directive 2016/1065, in particular recital 4, which explicitly excludes from the definition instruments that merely entitle the holder to discounts or promotional benefits on future purchases.
In the case at hand, the points were granted automatically, free of charge, as a result of previous purchases. They could not be sold, transferred, or redeemed independently of a subsequent transaction. Their use was conditional upon making another purchase from the same seller, and they did not serve as payment for the purchased goods but merely enabled the customer to receive an additional low-value item. The Court held that such a mechanism does not create an obligation for the seller to accept the points as a form of payment, but rather constitutes a voluntarily granted promotional benefit. Consequently, the points do not function as a monetary equivalent and do not meet a key criterion of a voucher.
The Court further explained that, for an instrument to qualify as a voucher, it must have independent economic value. It must constitute a separate, redeemable right to receive goods or services, and its use cannot depend on additional conditions, such as entering into another sales transaction. Points that operate solely as part of a marketing program and cannot be used independently do not create value that could be treated as consideration for VAT purposes. The Court noted that mechanisms making the use of the instrument conditional upon a further purchase generally fall outside the scope of vouchers under the VAT Directive, as they lack the element of reciprocity characteristic of taxable transactions.
The reasoning also emphasized that the mere possibility of exchanging points for goods of a certain value does not in itself establish a payment function. Promotional instruments often allow customers to obtain free goods, but in such cases there is no equivalent exchange of consideration between the customer and the seller. The Court pointed out that, in the case of vouchers, the instrument itself is the basis for the supply, whereas in loyalty schemes, points merely modify the benefits granted to customers based on their prior behavior. This distinction is relevant for VAT purposes, as only instruments that effectively replace money require specific VAT treatment. The absence of such a function means that loyalty points fall outside the voucher regime, even if they can be used to obtain goods in practice.
The Court also referred to the principle of legal certainty, stating that the classification of an instrument as a voucher must be possible at the time of its issuance. Loyalty programs based on points are typically characterized by changing values, conditions of use, and the range of goods available for redemption. The lack of a stable and clearly defined economic value prevents such points from meeting the predictability requirement associated with vouchers. The Court stressed that the VAT system cannot rely on instruments with variable economic content, as this would complicate the determination of the taxable amount and the timing of taxation.
As a result of concluding that the points do not constitute vouchers within the meaning of Article 30a of the VAT Directive, the Court held that Article 73a, which governs the taxable amount for multi-purpose vouchers, does not apply. Accordingly, there was no need to analyze how the taxable amount should be calculated upon redemption of the points. At the same time, the Court emphasized that the classification of any instrument must be based on its actual nature and economic substance, rather than the taxpayer’s designation. Reward mechanisms based on points granted for previous purchases and redeemable only upon a further purchase were thus clearly classified as promotional tools falling outside the scope of vouchers under the VAT Directive.
This judgment clarifies the VAT treatment of loyalty programs and delineates the boundary between promotional and payment instruments. It highlights the necessity of the obligation to accept an instrument as consideration as a key element of classification and confirms that not every instrument allowing the acquisition of goods qualifies as a voucher for VAT purposes.