Astra Zeneca and VAT: When sacrifices can be painful
August 18, 2010 in Indirect Taxes
Richard Woolich, Tax Partner, DLA Piper UK LLP, London
On July 29, the European Court of Justice (ECJ) delivered its judgment in Astra Zeneca UK Limited v. HMRC (Case C-40/09). The reference to the ECJ was for a preliminary ruling on the VAT implications of an employer issuing to its employees vouchers with a cash value exchangeable for goods or services at certain well-known retailers, in return for the employees giving up part of their remuneration (a salary sacrifice).
The ECJ’s ruling that the remuneration given up constitutes consideration for the issue of the vouchers, giving rise to a VAT liability for the employer, has important implications for employers running similar schemes….
The full version of this article is in the BNA International Tax Centre.
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