BERTELSMANN CASE

BY ALAN OSBORN
BOOK club companies must pay value added tax on the costs of delivering gifts in kind to existing customers as a reward for bringing in new business, the European Court of Justice has ruled. The judgement came in a case involving clubs operated by the German media giant Bertelsmann between 1985 and 1990 when books, records and bicycles were given to subscribers in return for the introduction of new members.

Bertelsmann's claim that the cost of transporting these gifts were excluded from sales taxes by the EU's Sixth Directive on VAT was ...


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