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An airline has requested a ruling on the VAT treatment of a mileage accumulation and redemption system. The DGT has determined that the management of these miles constitutes a promotional service subject to the standard rate, and that the redemption process acts as a discount on the original sale.
This ruling clarifies the VAT implications for companies operating loyalty programmes, establishing that the administration of such schemes is a taxable promotional service, while the actual redemption of points or miles is treated as a discount.
The tax team reviews your specific situation.
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