In this article, the authors discuss the judgment of the Court of Justice of the European Union (ECJ) in Loyalty Management and Baxi. Whichever rationale the ECJ had in mind, the effect of its decision on loyalty rewards is disastrous. In designing a tax which has to be interpreted in the tax courts of 27 different jurisdictions, it is essential to have sensible overriding principles to which those courts can refer. By moving away from a basic “the supply follows the money” approach, the ECJ has not only backed away from the neutrality principle, but has also arrived at a position where the taxation of transactions will be dictated by their form.