Skatterådet issued a binding response (SKM2025.237.SR) on May 6, 2025, concerning VAT and payroll tax for a business purchasing and reselling fuel. The decision, made on March 25, 2025, concludes that the inquirer operates as a commission agent in these transactions. This determination holds even with added services like CO2 compensation and digital monitoring.
- Business Model Overview: The business model involves the purchase and resale of fuel by a company based in Germany, which procures fuel from suppliers (mainly gas stations) and sells it to customers (Y1-customers) using fuel cards issued by the company. The Skatterådet (Tax Council) determined that the company acts as a commission agent, buying fuel from suppliers and reselling it to customers.
- VAT Treatment of Transactions: The Tax Council confirmed that the supply of fuel to customers is subject to VAT under the Danish VAT law (momsloven), specifically Section 4, and does not qualify as an exempt financial service. This means that the company’s transactions should be treated as taxable supplies rather than financial transactions.
- Conditions for VAT Liability: The ruling emphasized that the company bears full responsibility for any defects in the fuel supplied to customers. The fuel cards identify the company as the customer of the suppliers and facilitate the purchase of fuel, which aligns with the definition of a taxable supply under VAT regulations.
- Legal Framework and Precedents: The decision is supported by various legal references, including sections of the Danish VAT law and the EU VAT Directive. It is also influenced by prior EU court rulings, particularly regarding the distinction between taxable supplies and exempt financial services.
- Implications for Fuel Card Providers: The ruling establishes that fuel card issuers, like the company in question, can be considered to have purchased and resold fuel, provided they meet the necessary legal criteria for VAT treatment. This aligns with recent guidelines and rulings from the VAT Committee regarding fuel card systems, ensuring that they are treated as taxable transactions under specific conditions.
Source: info.skat.dk
ECJ Cases referred to
- C-320/88 (Shipping and Forwarding Enterprise Safe BV): This case established that the concept of “delivery of goods” does not depend on the formal transfer of ownership under national law but includes any transfer of a tangible good allowing another person to exercise ownership rights.
- C-2/95 (SDC): This case discusses the conditions under which certain services can be exempt from VAT, emphasizing the necessity for the services to form a distinct whole that fulfills specific functions.
- C-185/01 (Auto Lease Holland BV): The ECJ ruled that in a leasing arrangement involving fuel purchases, the leasing company did not supply fuel but rather provided a financing service. The court determined that the leasing company did not have control over the fuel, as the lessees decided on the quantity and timing of fuel purchases.
- C-235/18 (Vega International Car Transport and Logistic): This case concluded that a company providing fuel cards to subsidiaries did not deliver fuel to them but instead provided a financial service by pre-financing fuel purchases. The court ruled that there was no direct sale of fuel from the parent company to the subsidiaries.
- C-692/17 (Paulo Nascimento Consulting): This case involved the transfer of a claim and examined whether it constituted a VAT-exempt financial service or a taxable supply of goods.
- C-60/23 (Digital Charging Solutions GmbH): This recent case clarified the nature of transactions involving electric vehicle charging services. The court determined that the relationship between the charging station operator and the service provider could be classified as a commission arrangement, impacting the VAT treatment of the supplies involved.
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
