Czech Republic: Application of VAT to fuel cards

A working paper on the application of VAT to fuel cards was issued by the EC VAT committee

A working paper on the application of VAT to fuel cards was issued by the EC

The European Commission's value added tax (VAT) committee issued a working paper on the application of VAT to fuel cards that does not entirely conform to the usual administrative practice.

According to existing practice, fuel card issuers in the most usual business models (“buy/sell” or “commissionaire” model) carry out two transactions from a VAT viewpoint:

  • Purchase of goods (fuel) from the fuel station owner
  • Delivery of goods (fuel) to the vehicle operator

This was also the view expressed by the EC’s VAT expert group, and according to the information available, this approach has so far also been respected by the Czech financial administration.

The VAT committee has now responded to the expert group's views, adopting a relatively surprising position: for the standard buy/sell model it can be argued that the fuel card issuer does not at any moment acquire the right to dispose of the fuel as the owner. In line with CJEU Judgment C-235/18 Vega, the committee concluded that the fuel card issuer merely finances the purchase of fuel on behalf of the vehicle operator, i.e., provides a financial service exempt from VAT.

On the other hand, for the commissionaire model the VAT committee agrees with the existing interpretation, i.e., it recommends that the transactions carried out by fuel card issuers in a chain of transactions need to continue to be viewed as the acquisition and subsequent supply of goods (fuel).

KPMG observation

Tax professionals do not yet know the response of the Czech financial administration to the VAT committee's stance. Since a broad interpretation of the committee's conclusions may have an adverse implication on the fuel card market, it is recommended to prepare for this situation well in advance.

Read a December 2022 report prepared by the KPMG member firm in the Czech Republic


The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.