Judgment of the Court of Justice of the European Union 15 May He ruled that fuel card issuers, as well as their customers, could not deduct VAT on purchased fuel, which could significantly change the way the accounts have been settled. The sentence does not apply to fuel companies.
TSUE in Vega International, ref. C-235/18 concluded that fuel card issuers, i.e. leasing companies, car fleet management companies and their customers, provide financial services (credit) because they do not sell goods.
The problem is that the credit service is exempt from tax, and therefore these entities do not have the right to deduct VAT on purchased fuel. The judgment raises some concerns among companies that, after the judgment, examine the key contracts concluded in this situation between the card issuer (e.g.
the leasing or fleet management company) and the customer purchasing the fuel.
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The ruling is not concerned by fuel companies, since the judgment does not apply in principle to them – in this case, between fuel card exhibitors and customers buying petrol or diesel comes directly to the supply of goods. Tax collectors c can therefore deduct VAT.
Settlement method so far
- Non-cash refuelling by the user for the amount 123 PLN gross (VAT 23% – delivery of goods).
- Issue of an invoice by the company to the making available entity – 123 PLN gross (VAT 23%) – right to deduct 23 PLN.
- Issue of an invoice by the making available to the user (2% fees, as in fact) – 125.46 PLN gross (VAT 23%) – right to deduct 23.46 PLN.
Method of settlement according to the TEU
1. Non-cash refuelling by the user for the amount 123 PLN gross (VAT 23%),
- Issue of an invoice by the company to the making available entity – 123 PLN gross (VAT 23%) – no right of deduction.
- Issue of an invoice by the making available to the user – 125.46 PLN gross (VAT: ww) — no deductionable VAT.
The situation of other companies (mainly leasing) and their customers may be quite problematic after the judgment of the TEU. A new interpretation of the rules may imply an obligation to make a VAT deduction (to 5 years back).
Credit card issuers should extract the VAT charged in connection with these services (as they are exempt service providers) and, if not possible, deduct only from the part of the VAT charged calculated in proportion.
If they do not comply and have not applied in the past, they may be required to correct the deductions made for five years back. The Ministry of Finance is examining the case and may soon issue a general interpretation on a problematic issue.