Aleksandra Majnusz

Steuerberaterin (Polen)
Senior Associate
Phone: + 48 32 330 12 27

Pursuant to Article 7(8) VAT Act, if several entities supply the same goods in such a way that the first one hands the goods over directly to the last buyer, it is deemed that the supply of goods is effected by all entities taking part in those transactions. However, the standpoint of tax authorities and courts is that in the case of fuel supplies, for which payments are made with fuel cards, there is no supply of goods, neither between the supplier and the intermediary nor between the recipient and the intermediary.

The recharging practice

For years it has been beyond any doubt that in the case of supplies made by intermediaries (chain supplies) a legal fiction is created for VAT purposes in which the supply is made to every enterprise in the chain although some of them do not physically receive the goods. This means that intermediaries need no means for storage or transportation of goods because they do not physically dispose of the goods. This does not deny their status of VAT taxable persons.

Similar fiction has been created for the supply of services (recharging). If a taxable person acting on his own behalf but for the benefit of a third party participates in the service performance, it is assumed that the same taxable person has received and supplied the services. The rule, resulting from Article 28 of the Council Directive No. 2006/112/EC of 28 November 2006, was transposed directly into the Polish law in 2011 by virtue of the newly-added Article 8(2a) of the Polish VAT Act. The said regulations classify the intermediary in the performance of services as a service recipient and a service provider at the same time. Therefore, charging a contracting party with costs of a given service is deemed to be subject to VAT although the issuer of a VAT invoice for a given service does not actually perform the service.

CJEU judgment on fuel purchases using fuel cards

The concept was changed in Poland first in the judgement of 14 August 2012 (I FSK 1177/11) in which the Supreme Administrative Court (SAC) held that purchases of fuel with fuel cards should have been regarded as financial services. Thus, the intermediary could not deduct the input tax on the fuel purchase because in fact he did not purchase any goods.

The unfavourable ruling of the SAC followed from the judgement of the CJEU of 6 February 2003 in the case of Auto Lease BV (file no. C-185/01). The CJEU stated that whenever a lessor gave fuel cards to lessees there was no supply of goods for the lessor even if the lessee purchased fuel for and on behalf of the lessor. The CJUE argued that the lessor could not decide about the way and the purpose of the fuel consumption, in particular he could not influence the delivery date of the goods, the volume of purchases or the price of the fuel. Therefore, he did not participate in the supply of fuel, and the invoices he issued to the company did not entitle him to deduct VAT.

Following the above approach means that both the invoice issued by a fuel company to an intermediary and the invoice issued by an intermediary to the end purchaser are empty invoices because they do not document the actual transaction. For fuel card issuers this means:

  • no right to deduct VAT on invoices from filling stations;
  • recognising the sale performed by an intermediary as VAT-exempt;
  • problems with determining the taxable base of transactions made using the fuel cards (whether the taxable base should include the fuel value or only a margin, whether bonuses and rebates granted by filling stations should be accounted for, and how the resale of fuel without margin should be treated);
  • a possible requirement to use a ratio when deducting VAT (recognising a part of the turnover as tax-exempt).

The actual course of the transaction

Although the CJEU judgements set precedents and should be accounted for by courts when deciding cases, you have to remember that they are issued in a given case and in a given factual situation. 

In typical non-cash purchases with fuel cards at the filling stations the intermediary who gives fuel cards to its customers (enterprises that want to enjoy certain simplifications in business such as: non-cash purchases, simple and transparent monitoring of expenses, summary invoicing, and in the case of travels abroad – limiting the necessity to carry local currencies, etc.) receives invoices from a fuel company for purchases made by the customers. Then, in turn, on the basis of the invoices received he himself issues sales invoices to his customers so that in the end they incur the costs of the fuel, cleaning supplies or washing services. The financing of the fuel purchase is not the essence of the transaction. The fuel cards do not serve as means of payment but only for recording transactions. 

Although the intermediaries never take possession of fuel, it does not change the fact that they act as agents in supplies of fuel and not in the performance of financial services. 

The mere fact that one of the entities does not take possession of goods does not prevent the transaction from being recognised as a supply of goods in light of the VAT Act.  

Judgments on chain supplies

The tax authorities challenge the concept of chain supplies most often when they refund the VAT to foreign companies in the procedure described in the Regulation by the Minister of Finance of 29 June 2011 concerning the refund of value added tax to certain taxable persons. 

However, some tax authorities are of the opinion that firms operating according to the above-described business model participate in chain transactions and are entitled to deduct VAT. An example here may be the advance ruling of the Director of the Tax Chamber in Warsaw dated 3 February 2014 (file no. IPPP2/443-1272/13-2/KBr). The Director of Tax Chamber confirmed that the case at hand described a chain transaction and all companies participating in it were entitled to deduct VAT.

This standpoint was also shared by the Provincial Administrative Court in Warsaw in its judgement of 22/04/2014 (file no. III SA/Wa 2040/13) and its earlier judgements of 17/01/2013 (file no. III SA/Wa 1739/12) and of 24/04/2013, file no. (III SA/Wa 3280/12).

There are also judgments contrary to those above, e.g. judgement of the Provincial Administrative Court in Poznan of 15 May 2014 (I Sa/Po 1233/13).


In the context of the above judgements, the only sure thing is that the case law concerning the right of fuel card issuers to deduct input tax on fuel purchases is inconsistent. In order to find out whether an entity participating in the chain supply has the right to deduct input tax on the purchase of fuel, the facts and circumstances of a given case must be thoroughly analysed and the relevant contracts must be appropriately structured. 

Although we are of the opinion that a fuel card agreement can be hardly recognised as a loan agreement there is still a risk that the tax authorities will challenge the right to deduct the input tax disclosed in invoices for fuel purchases, which were received or issued by a fuel card issuer. 

If you think of signing such agreements, you should keep in mind the argumentation of the CJEU. In addition, in order to confirm the right to deduct the tax on fuel purchases you should apply for an advance tax ruling. 

We encourage you to contact us – we would be glad to offer our tax advisory in Poland. Our tax advisers working in Rödl & Partner offices in Gdansk, Gliwice, Cracow, Poznan, Warsaw and Wroclaw will also answer other tax-related questions that you may have.