Belgian VAT treatment of fuel card transactions

According to the CJEU (Cases C-185/01, Auto Lease and C-235/18, Vega International), the use of fuel cards only results in one supply subject to VAT, that is the supply of fuel to the fuel card holder. The sum retained by the fuel card issuer is seen as a VAT exempt granting of credit.

This position was however recently nuanced by the EU VAT Committee, which almost unanimously agreed that in the framework of a commissionaire arrangement, fuel card transactions constitute a chain of VAT- taxable supplies of fuel. This is the case where:

• there is a formal transfer of ownership of the fuel (cf. credit risk and liability);
• the supplies to/by the fuel card issuer are the same; and
• an agreement is concluded between the fuel card issuer and the principal seller.

Given the extensive definition of commission arrangements in the Belgian legislation, in a new Circular letter 2024/C/18, the Belgian tax authorities specified that this also applies when:

• There is an upfront agreement between the fuel card issuer and the fuel suppliers specifying the relevant conditions relating to the supply of fuel; and
• Invoices are issued from the fuel suppliers to the card issuer and from the latter to the card holder.

Key takeaway

The flexible positions of the EU VAT Committee and the Belgian tax authorities are welcome for the sector, since they result in fuel cards exceptionally giving rise to an exempt granting of credit. Yet it is now more critical to verify that the respective conditions they set out are met, as the case law of the CJEU does not appear to leave room for any further flexibility whatsoever.

Reference: Search for document here (document reference: f11d2d8d-d8e8-41f0-b572-d0b29f943c36)