Poland clarifies VAT rules on fuel card transactions

Poland provided more clarity on the VAT treatment of purchases made with a fuel card.

19 April, 2021


VAT rules on fuel card supplies and purchases are subject to different interpretations in each country.

The Polish Ministry of Finance issued a general ruling to define the VAT rules on fuel card supplies and the scope of supplies of goods versus supplies of services in these transactions.

What is a fuel card?

A fuel card is used to facilitate the purchase of fuel in gas stations made by businesses and transport companies. The fuel card company issues a fuel card for their customer. The customer is then able to use this fuel card to purchase fuel and other items at gas stations that participate in the program. This offers various advantages to the customer, as by using the fuel card, they will receive a single invoice instead of a separate invoice for every fuel purchase.

Normally, there are three parties involved in this scheme: the gas station, the fuel card issuer, and the final client. When the final client purchases fuel in a gas station, there is a flash-sale from the gas station to the card issuer and a subsequent flash-sale from the card issuer to the final client. Very often, this makes the card issuer liable to register for VAT in all countries where the scheme takes place.

What are the VAT rules on fuel card supplies?

In most countries, the VAT rules on fuel card supplies consider a supply of goods from the gas station to the fuel card issuer and a supply of goods from the fuel card issuer to the final customer.

Fuel card companies are often required to register abroad. Their clients can still recover VAT. Contact Marosa for help.

However, there are several exceptions. In general terms, the main issue with fuel card transactions is determining if they should be deemed as a supply of goods or services when analyzing the supply chain with three parties mentioned above.

Furthermore, another issue was if the supply chain was constituting a sale of goods between the supplier and the intermediary, and then to the customer, or if the sale was between only the supplier and the recipient with the intermediary acting as a service provider to the customer.

What was decided with the Polish general ruling?

Only transactions in which there are three taxpayers involved when using fuel cards qualify for the general ruling. In these cases, the parties involved are the supplier, the intermediary, and the customer. 

In light of the above issues, the general ruling clarified that in order to determine if the transaction was indeed a supply of goods or services, first it was crucial to identify to which party the supplier was transferring the ownership of the goods to. It was determined that the transaction would be considered as a supply of services if the following conditions were met:

  • Suppliers provide the fuel card directly to the customer
  • The customer decides the method of purchase, the quality and the quantity of fuel purchased, the moment of purchase and how the fuel will be used
  • The customer is entirely responsible for the cost of the fuel (in other words, the intermediary is not responsible for any of the purchase costs)
  • The intermediary has a limited role only to make the fuel card available to the customer

When all of these conditions are met, the transaction under the general ruling is considered to be a supply of services between the intermediary and the customer. The transaction is therefore exempt from VAT and treated as a financial service, and therefore no input VAT can be deducted.

If any of the above conditions are not met, then the transaction is no longer considered as a supply of services and will then be considered as a supply of goods. In this case, the input VAT can be deducted between the supplier and the intermediary, and between the intermediary and the customer.

You can find more information on claiming back VAT by clicking on this link.

 

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