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V2470-14 23 September 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · programa de fidelización

Loyalty programme management services subject to VAT; point redemption does not reduce taxable base

An entity requested a ruling on the taxation of a loyalty points platform. The DGT has determined that management services constitute promotional services subject to VAT, and that the redemption of points does not represent a discount on the current sale, but rather a consideration paid by a third party.

The question raised

Taxation of the operation for Value Added Tax purposes.

The DGT's ruling

The services of the management entity are classified as promotional services subject to the general rate of 21%. The issuance and redemption of points are not independent operations, but rather part of the promotional service, upon which the tax must be applied to the commission received. In a sale where points are redeemed, the taxable base is not reduced by the value of the points, as these constitute consideration paid by a third party (the management entity) to the entity making the sale. The entity that issued the points may reduce its taxable base of the original sale by the amount of the redeemed points, provided that the management entity has effectively reimbursed said amount.

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