The case concerned an Austrian parent company who provided fuel cards to its Polish subsidiary. The Polish subsidiary could use these cards to buy fuel. However, the fuel supplier invoiced the parent company. The parent company subsequently charged the costs of the fuel to its subsidiary and applied for a VAT-refund for the VAT paid to the fuel supplier from the Polish Tax Authorities. The Tax authorities refused the refund. The Polish referring Court asked the ECJ whether the parent company provided a (VAT-exempt) financing service to its subsidiary or a supply of fuel and consequently has the right to a refund of VAT.

The ECJ ruled that the parent company has not purchased and supplied fuel, but provided a (VAT-exempt) financing service. The subsidiary should be considered as the recipient of the fuel and is entitled to recover VAT on fuel costs. This is in line with the earlier Auto Lease Holland case (C-185/01).

The facts of the Vega case are very similar to the situation in which a card company or a leasing company - like the parent company - incurs and on-charges costs to the actual user of the card (the driver / lessee). In our view, the Vega case should however not affect the current Dutch practice of these businesses. Recently, the secretary of Finance issued in this respect a decree in which he explicitly confirms that in Dutch practice card companies are entitled to recover input VAT, provided that some conditions are met.

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