- The European Court of Justice (ECJ) has ruled that there is no VAT on free welcome subscription gifts.
- The case involved Deco Proteste
- Editores Lda, a company that gives gifts to new magazine subscribers.
- The Portuguese tax and customs authority considered the gifts to be subject to standard VAT rate.
- The ECJ determined that the gifts were part of a single supply with the subscription and constituted a “supply of goods for consideration.”
- The purpose of the gifts was to increase the number of subscribers and the company’s profits.
- Therefore, the provision of gifts in return for subscription cannot be considered a free disposal of goods.
Source: kpmg.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
