Netherlands: VAT 0% rate for provisioning ocean vessels; CJEU judgment

Netherlands: VAT 0% rate for provisioning ocean vessels

The Court of Justice of the European Union (CJEU) rendered a judgment in a case concerning whether the supply of fuel on board ocean-going vessels is subject to value added tax (VAT) at a zero rate (0%) if the fuel was sold and invoiced by an intermediary acting in its own name. The CJEU found that the VAT 0% rate can, under specific conditions, apply to this fuel supply.


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The case identifying information is: Fast Bunkering Klaipėda UAB 


In the Netherlands, the VAT 0% rate can only be applied in the “last link” in the chain of supply of fuel for use in seagoing vessels. The “last link” concerns the legal supply to the operator of the seagoing vessel. Supplies occurring in earlier links in the chain are subject to the general VAT rate of 21%. 

With this CJEU judgment, the VAT 0% rate can be applied in specific situations—for example, if the fuel is pumped directly into the ocean-going vessel’s tanks. The CJEU concluded from this that the ability to dispose of the quantity of fuel supplied was only transferred to the ship operators from that moment on, while the determination of the quantity of fuel supplied and the invoicing of the intermediary only takes place after this. According to the CJEU, under these circumstances, there may be a direct VAT supply to the ship operators and that the VAT 0% rate can be applied to this supply.

KPMG observation

Because of this judgment, it may be prudent to re-examine the VAT treatment of bunker fuel transactions. 


Read a September 2015 report prepared by the KPMG member firm in the Netherlands: CJEU: zero VAT rate also applies to the provisioning of seagoing vessels via an intermediary

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