The Court of Justice of the European Union has published its judgment in Case C-235/18 Vega International Transport and Logistics - Trading GmbH v Dyrektor Izby Skarbowej w Warszawie, classifying the provision of fuel cards to its subsidiaries for the purpose of purchasing fuel as credit-granting services - exempt without deduction right.
The company Vega International performs commercial vehicle transport activities through several subsidiaries, including Vega Poland. In order to purchase fuel, Vega International offers fuel cards issued by various fuel suppliers to all its subsidiaries. Vega International subsequently receives and administers all fuel invoices subject to VAT issued by fuel suppliers, then manages, negotiates and pays them, before re-charging the amounts plus a 2% commission to its subsidiaries, including Vega Poland.
Through a national ruling issued on 11 August 2014, the Polish tax authorities refused Vega International the VAT refund on the grounds that it did not perform supplies of goods (i.e. fuel supplies, in this case), but rather rendered services to Vega Poland consisting of financing for the purchase of fuel – exempt without deduction right.
The Court considered that, by applying the 2% commission, Vega International charges a remuneration for a supply of services to its Polish subsidiary and, thus, provides a financial-banking service by financing the purchase of fuel. The Court ruled that, for the transactions in question, Vega International acts as a financial or credit institution, classifying an operation of this type as a non-deductible financial-banking operation.
The CJEU ruling emphasises that it is very important to analyse the type of transaction in question, i.e. whether it is a supply of goods or a supply of services, in order to establish the VAT treatment applicable.
It is important to consider that nominative cards made available to companies in order to perform certain acquisitions may qualify as a credit-granting service, exempt without deduction right.
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