On 15 February 2021 the Polish Minister of Finance issued a general ruling regarding classification of transactions carried out with the use of fuel cards for VAT purposes. It affects the settlement of VAT. The ruling applies only to three-party transactions where the card is provided by an intermediary entity (e.g. a leasing company), and not by the issuer (e.g. a petrol station).
Depending on whether a given transaction meets the conditions included in the ruling, it may be a supply of goods or provision of financial services. According to the VAT Act, in case of supply of goods the taxpayer has the right to deduct VAT, whereas in case of provision of financial services it is not possible, because this activity is exempt from VAT.
The ruling indicates that when classifying a transaction as a supply of goods or provision of financial services, it is necessary to determine:
- to which entity the supplier has transferred the right to dispose of the goods as owner;
- whether the intermediary entity providing the fuel cards thus renders a service for the recipient.
On the other hand, the fact that the right to dispose of the goods as owner has been transferred by the supplier of the goods to the recipient in the course of transactions carried out with the use of fuel cards, should be stated when all the following conditions are met:
- the goods are purchased by the recipient (the fuel card holder) directly from the suppliers;
- the recipient, at their sole discretion, decides on the method of purchase of goods (the place of purchase), the amount and quality of goods purchased, as well as the moment of purchase and the manner in which the goods are used;
- the entire cost of the purchase of goods is borne by the recipient (excluding the intermediary entity);
- the role of the intermediary entity is limited to providing the recipient with a financial instrument (a fuel card) enabling the recipient to purchase the goods (fuel).
Thus, if all of the above conditions are met, the entity providing the fuel card to the purchaser of fuel merely provides a financial service to the latter and does not transfer the right to dispose of the fuel as owner. Consequently, the purchaser does not have the right to deduct VAT on fuel purchased by him.
When issuing the general ruling, the Ministry of Finance also confirmed that due to the repeal of Art. 7(8) of the VAT Act, i.e. as from 1 January 2021, individual rulings on this provision became invalid. This also applies to individual rulings on fuel cards – after the repeal of Art. 7 they are no longer valid. This may have a significant impact on the settlement of popular fleet fuel cards intended especially for freight and bus services.
If you need assistance in settling fuel cards provided by both intermediaries and issuers – please contact us. We would be happy to clarify any doubts you may have on this subject.
If you have any additional questions about tax or require further information, please contact your relevant contact person who will forward your enquiry to the department:
Partner / Attorney at law (PL)
Specialisation: Tax law
Head of getsix Tax & Legal
getsix Tax & Legal
Our specialist tax advisors, headed by Mrs. Aneta, are at your disposal. You will find the contact form on the getsix website.