On October 8, 2023, the European Union Court of Justice (EUCJ) issued a ruling on the free delivery of a tablet or smartphone as a reward for subscribing to a new magazine. The EUCJ determined that granting a subscription gift constitutes an ancillary supply to the principal supply of periodicals, which falls under the concept of “supply of goods for consideration” and should not be considered a free supply of goods (self-consumption).
The EUCJ based its judgment on the premise that granting a subscription gift to new subscribers serves as an incentive for subscription, solely aimed at increasing the number of subscribers to the magazines published by the claimant, thereby enhancing their profits. In other words, the delivery of the gift does not have an independent purpose from the perspective of the average consumer, who agrees to pay at least one month’s subscription fee to receive the gift. The subscription to these magazines, on one hand, and the gift of a tablet or smartphone with a unit value of less than 50 euros per new subscription, on the other, form a set in which the subscription constitutes the main supply, while the gift is an ancillary supply whose sole purpose is to incentivise the subscription.
This criterion, consistent with previous EUCJ rulings, might help us in interpreting when we are dealing with ancillary supplies for VAT purposes.
Access to the full sentence HERE
