New VAT policy for fuel and charging cards

Subsequent supplies when using fuel or charging cards?

When using a fuel or charging card, the supplier of the fuel/electricity is usually paid by the issuer of the respective card. This card operator then settles with the cardholder.

For VAT purposes, the question is who supplies to whom and how invoicing should be handled.

Older case law from the EU Court of Justice (“ECJ”) suggested that the fuel/electricity was always supplied directly to the cardholder (as they decided on the purchase). intermediate parties were then disregarded and the card operator provided a financial service to the cardholder. An undesirable situation for practice.

However, in 2024 the ECJ ruled in the Digital Charging Solutions case. Unlike its earlier rulings, the ECJ recognized a chain of successive supplies of fuel/electricity when using a fuel or charging card (supplier supplies to card operator, card operator supplies to cardholder). A condition was that the card operator acted as a commission agent; meaning they acted in their own name but on behalf and at the risk of another party. For VAT purposes, this results in two subsequent supplies (to/by the commission agent).

Whether or not someone acts as a commission agent depends on the agreements made between the parties.

The practical arrangement in the updated decree

In the updated decree, the State Secretary of Finance introduces a practical arrangement whereby VAT follows the invoice flow. If the fuel/electricity is invoiced by the supplier to the card operator and then by the card operator to the cardholder, it is assumed that the card operator acts as a commission agent and that subsequent supplies occur for VAT purposes. A condition is that all invoices refer to the same products. VAT thus follows the invoice flow.

The above also applies if more parties are involved in the transaction chain.

Practical relevance

This change provides clarity on the VAT treatment of fuel and charging cards. With subsequent invoices (and thus subsequent supplies), both the card operator and the cardholder are considered recipients and may claim a right to deduction.

Fuel and/or charging card operators should review their contracts and invoicing processes to fully benefit from the new policy.