CAA de VERSAILLES, 06.06.2017, 17VE00830, TVA, Programme de fidélité
In the present case, the Administrative Court of Appeal of Versailles (Cour administrative d’appel de Versailles) had to examine a loyalty rewards program in the light of the EU system of VAT.
The company Marriott Rewards Llc, established in the United States, asked the Administrative Court of Montreuil (Tribunal administratif de Montreuil) to grant the refund of the VAT charged to it by the hotels participating in the loyalty program of which it was the manager.
The Administrative Court of Montreuil granted the application and the Minister of finance and public accounts lodged an appeal against it alleging that the company had no right to VAT deduction.
The Administrative Court of Appeal of Versailles recalled that according to Directive 86/560/EEC, Directive 2006/112/EC and Directive 77/388/EEC, such as interpreted by the EU Court of Justice (cases C-53/09 and C-55/09), payments made by a loyalty program manager to its suppliers might be regarded as the consideration, paid by a third party, of a supply of goods or services to its customers, which could not be regarded as remuneration for goods and services used by the program manager for the purposes of its operations.
Consequently, the Administrative Court of Appeal annulled the contested judgment on the grounds that the payments operated by Marriott Rewards Llc should be regarded as the consideration paid by a third party for the provision of services rendered to the clients or the final customers of those hotels, which could not therefore benefit from VAT deduction.
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