Transactions were executed through intermediaries, i.e., intermediaries submitted purchase orders to the company and received invoices for such acquisitions. The Tax Authorities challenged application of zero-rated VAT stating that the fuel was supplied not to the ships operators directly but to intermediaries acting at their own name.

Intermediaries were those who supplied the fuel to operators, therefore, the application of zero-rated VAT by the company was not justified. The company presented evidences that the intermediaries were never physically participating in the supply of fuel, their responsibilities were to organise orders and ensure payments for fuel purchased and the exact amount of fuel purchased was determined only after loading fuel to ships.

EUCJ explained that zero-rated VAT rate is not applied when goods are supplied to intermediaries acting at their own names even if the final use of those goods is clear on the date of supply and evidence confirming this fact is submitted to the Tax Authorities according to the national legislation.
However, the exemption can be applied if transfer of title to such goods is performed to intermediaries at the same time the earliest when operators of vessels used for sea navigation actually receive the right to dispose these goods as owners.