Point of law: whether marketing (incentive) bonuses for the volume of sales and for the presence of a commodity in shops payable by suppliers to retail sellers (retail chains) constitute a payment for services and as such ought to be included into sellers’ tax base for the purposes of VAT, or those bonuses are merely a way of price determination and therefore must not be included into tax base?

Alternative attitudes: 1) marketing bonuses do not constitute a payment for services, because they are not connected with the performance of any specific services by sellers for suppliers (that is, there is no consideration); correspondingly, no object for VAT taxation exists – there is no sale of services to suppliers (the view of inferior courts); 2) marketing bonuses are a payment for services – the retailer’s service consists in enabling the suppliers for remuneration to sell goods in his retail chain; consequently, a sale of a service does take place, and hence there is an object of VAT taxation (the view of the panel of judges which referred the case to the Presidium).

Ratio decidendi: the Presidium held the first view to be right in law, saying that since the bonuses are directly connected to the supply of goods, they are a form of trade discount (rebate) that apply to the price of goods, and as such they decrease VAT base of suppliers and the amount of VAT deductions (input VAT) of retail seller (the purchaser of those goods).

Practical consequences: the Judgment says that prior court decisions in analogous cases if inconsistent with this interpretation may be reversed in the procedure and within the limits envisaged by Art 311 of the Commercial Procedure Code.