Danish draft guidelines regarding the VAT treatment of fuel cards

The VAT handling on fuel cards has been unclear for years, culminating when the Danish Tax Authorities enforced a complete stand-still in the VAT refund process. The guideline has therefore been long-awaited and is highly welcomed by all parties.

Previously, a card issuer / leasing company could not be considered as supplying fuel, cf.C-185/01, Auto Lease and C-235/18, Vega International. Instead, the issuer / leasing company was regarded as providing financing services to the card holder.

Following the draft guideline, an issuer of a fuel card / a leasing company (intermediary) can be considered to supply fuel as a commissionaire, from a fuel company (principal), provided that:

1. the legal title to the fuel is transferred to the intermediary,
2. the supply to and from the intermediary is similar, and
3. a commissionaire agreement is concluded between the intermediary and the principal.

The draft guideline has been issued for consultation to interested parties and is therefore yet to be adopted.

Key takeaway

The draft gives operators the possibility to continue VAT efficient fuel card structures. However, it may require a reassessment of the sales model, as a conventional buy/sell structure is no longer applicable. Such review should therefore explore transitioning to a commissionaire structure.