Comments on T-638/24: Double dip alert – an incorrect invoice can create multiple VAT liabilities

Incorrectly invoiced VAT on intra-Community supplies can create multiple VAT liabilities: one from the invoice itself and another from the “safety net” mechanism if the wrong VAT number is used.
The General Court confirmed that both liabilities can legally coexist, even if this results in what feels like double taxation in the same Member State.
This outcome arises from two separate legal mechanisms: Article 203 VAT Directive (VAT liability from invoice) and Article 41 VAT Directive (safety net for intra-Community acquisitions).
The case highlights the complexity and potential pitfalls in the intra-Community VAT system, especially regarding the use of VAT numbers and correct invoicing.

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General Court Ruling on VAT and Intra-Community Acquisitions (T-638/24)

The Austrian company D GmbH incorrectly deducted Austrian VAT on goods transported to other EU Member States, as suppliers invoiced VAT despite the transactions being classified as exempt intra-Community acquisitions.
The German tax authorities deemed the transactions as intra-Community acquisitions taxable in Austria, leading to a refusal to deduct input tax, prompting D GmbH to challenge this decision on the grounds of proportionality and fiscal neutrality.
The General Court ruled that VAT Directive provisions allow for taxation of intra-Community acquisitions in the Member State of departure, clarifying that supplier tax liability arises from incorrect invoicing rather than the actual taxability of the transaction, ensuring VAT neutrality is maintained.

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Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.