Vega International – ECJ finds that a parent’s funding of fuel costs of subsidiaries was a provision of credit rather than a purchase and on-sale of the fuel

The parent (Vega International) of a transport group of companies provided fuel cards to its subsidiaries (e.g., Vega Poland) which drivers used to purchase fuel, with Vega International charging Vega Poland on a monthly basis for the cost of the fuel plus a 2% surcharge.

The ECJ rejected the proposition that Vega International was purchasing goods (the fuel) and on-supplying those goods to Vega Poland, noting that Vega Poland had the sole discretion as to when to purchase fuel. Instead, the ECJ found that Vega International was making a VAT-exempt supply of credit, stating:

Vega International thus provides a financial service to Vega Poland by financing in advance the purchase of fuel and therefore acts, for that purpose, in the same way as an ordinary financial or credit institution.

Neal Armstrong. Summary of Vega International Car Transport and Logistic — Trading GmbH v. Dyrektor Izby Skarbowej w Warszawie, ECLI:EU:C:2019:412 (European Court of Justice, 8^th Chamber) under ETA s. 1223(1) – financial service – (g).