15 February 2021 saw the publication of Finance Minister’s public tax ruling on the VAT treatment of transactions involving fuel cards. The ruling was issued in the wake of CJEU’s decision in case C-235/18 Vega International.

The ruling addresses fuel card schemes which involve at least three entities:

  • an intermediary who supplies fuel cards but does not issue them (e.g. a leasing firm or parent company),
  • a cardholder who uses the card to pay for fuel,
  • a fuel supplier.

The issue in focus was whether, under the Polish VAT Act, a supply of fuel cards by the intermediary is a supply of services or a chain supply of goods.

The Polish authorities did not give a clear answer. Instead, they held that, given a multitude of fuel card schemes on the market, each case should be approached individually. The Minister also proposes a test for treating the transaction between the intermediary and the cardholder as a supply of services:

  • the goods are purchased by the cardholder directly from the suppliers,
  • the cardholder has exclusive discretion as to the details of the transaction (where, when, how much, the quality of the goods and how they will be used),
  • the cardholder incurs the full cost of purchasing the goods, and
  • the intermediary’s role is limited to providing the fuel card as a financial instrument enabling fuel purchases.

In addition, a notice issued by the Finance Minister to accompany the ruling reminds us that Article 7(8) of the VAT Act has been repealed so that the previous ruling on this matter is no longer in force.

Please note that a wrong classification of such a transaction may bring about adverse consequences not only for the suppliers of cards but also for cardholders (no right of deduction of VAT). As such, the problem concerns not only the fleet management industry, but also leasing companies or transport firms.

If these issues pertain to your business and you are interested in our assistance, please contact your WTS&SAJA consultant.

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