The state secretary of Finance published a decree which covers the question which party is entitled to recover VAT on fuel costs purchased with a fuel card. The decree provides welcome guidance for the automotive practice.

A fuel card enables the cardholder to purchase fuel without actually making a direct payment to the gas station. Instead, the gas station invoices the fuel card company for the purchased fuel, which on its turn invoices the cardholder. Based on the VAT system and European case-law it can be argued that a fuel card company cannot be considered the actual buyer of the fuel and therefore should not be entitled to a VAT recovery (see also the current pending case summarized in bit of 8 June 2018). However, the state secretary of Finance now explicitly confirms Dutch practice that card companies are entitled to recover input VAT, subject to the following conditions. The card company (i) recharges the fuel costs on a back-to-back basis, (ii) references the costs separately on its invoices to the cardholders, and (iii) eliminates the turnover generated by the recharges from the calculation of VAT recovery on general costs.

The decree however also raises questions. In particular it does not directly address car lease situations, in which the card company recharges fuel costs to a lease company, who on its turn invoices its customers (the cardholders), although a similar VAT treatment would be in line with the idea behind the guidance. Furthermore, it remains unclear what impact the decree may have on the way Dutch VAT practice deals with foreign fuel costs.

It is advised to assess the impact of the decree on a case-by-case basis.