On 15 February 2021, the Ministry of Finance issued a general tax ruling regarding qualification for VAT purposes of fuel card transactions. The ruling confirms the theses of CJEU’s judgment of 5 May 2019 in the Polish case Vega International C-235/18, indicating premises allowing to distinguish a supply of goods among three entities (taxed with VAT, with the right to deduct) from a provision of services (exempt from VAT).
Transaction for the provision of fuel cards should be qualified as the provision of financial intermediation services if the following conditions are jointly met:
- the recipient (cardholder) purchased fuel directly from suppliers operating fuel stations (e.g. fuel companies);
- only the recipient decided on how to purchase fuel (choice of place of purchase), the quantity and quality of fuel, the moment of purchase, and the manner of fuel use;
- the recipient (except for the intermediary) incurred all costs related to fuel purchase;
- the role of intermediary was limited to providing the recipient with a financial instrument (fuel card) enabling purchase of the goods.
If any of these premises are not met, the transaction of providing fuel cards should be regarded as a supply of goods within the meaning of Article 7 Section 1 of the VAT Act, carried out by an intermediary for the benefit of the recipient.
Unfortunately, the ruling does not dispel all doubts, in particular regarding transactions with more than three participants.
The ruling also reminds that as of 1 January 2021 Article 7 Section 8 of the VAT Act was repealed. This provision stipulated that if several entities deliver the same goods in a manner whereby the first entity delivers these goods directly to the last buyer in order, it is considered that the delivery of goods was made by each of the entities participating in these actions.
The Ministry declares that the above change was only of organizational nature and does not change the established VAT settlement rules. Nevertheless – all tax rulings issued on the basis of this provision with reference to settlement periods falling after this date lost their validity and thus their protective power.
This applies in particular to individual tax rulings issued in connection with chain transactions.
If Your company:
- uses fuel cards in its operations, or
- is involved in chain transactions
and you are not sure whether the above changes will affect your settlements – do not wait and contact our experts.