CJEU: fuel cards a financing tool?
The Court of Justice of the EU (CJEU) ruled in the case of Vega International (C-235/18), dealing with the taxation of purchases of fuel supplied to subsidiaries. Considering the nature of the service provided via fuel cards, the court concluded that the service is most similar to the granting of credit.
Vega International, an Austrian transport company, arranged the purchases of fuel for its subsidiaries (in various EU member states) via fuel cards issued to the subsidiaries’ drivers. The fuel was invoiced to Vega, which then charged these supplies to its subsidiaries with a 2% surcharge and local tax.
The CJEU adjudicated that the transaction did not involve the supply of goods to Vega, i.e. the transfer of the right to dispose of the fuel as its owner. The fuel was purchased from gas stations directly by the drivers (or the subsidiaries) themselves, who were free to choose the quality, quantity and type of fuel as well as the time of its purchase and its consumption. The CJEU thus concluded that through the fuel cards Vega had provided a simple tool to finance fuel purchases by the subsidiaries. Hence, the service was most akin to granting credit, and therefore exempt from VAT in individual EU member states. The CJEU thus confirmed the conclusions previously worded in the Auto Lease Holland case (C185/01) of 6 February 2003.
In light of the above, we recommend paying increased attention to this area.