BFG: Simplification Rule for Triangular Transactions Denied – Four Parties and Invoicing Defects

• ▸ The BFG (12 May 2026, RV/7100590/2019) denies the application of the simplification rule under Art. 25 Austrian VAT Act for the years 2009-2012 because four entrepreneurs were involved in the supply transactions and the invoices did not meet essential formal requirements (reference to the reverse charge on the last customer, valid VAT IDs).
• ▸ Essential invoicing defects: missing reference to the tax liability of the last customer as well as (partially) invalid VAT ID numbers of the recipients.
• ▸ Since 1 January 2023, the triangular transaction rule has been extended by the Austrian Tax Amendment Act 2022 to chain transactions with more than three parties — recently confirmed also by the General Court’s judgment T-646/24 of 3 December 2025.

Article

The BFG dealt in its decision of 12 May 2026 (RV/7100590/2019) with the application of the simplification rule for triangular transactions under Art. 25 Austrian VAT Act for the years in dispute 2009-2012. Four entrepreneurs were involved in the supply chains — according to the administrative practice at the time and the interpretation of the original wording of Art. 141 of the VAT Directive, the simplification was limited to chain transactions with exactly three parties.

In addition, there were essential formal invoicing defects: the explicit reference to the reverse charge on the last customer under Art. 25(4) of the Austrian VAT Act was missing, and some invoices showed invalid VAT IDs of the recipients. Both defects are, according to settled case law (cf. BFG 26.06.2023, RV/7104948/2019), substantive conditions of the simplification — their breach leads to the denial of the transfer of the tax liability and to the tax liability of the middle trader in the country of destination.

Important note – legal situation since 2023: With the Tax Amendment Act 2022, the triangular transaction rule in Austria has been extended as of 1 January 2023 to chain transactions with more than three parties, provided that the other statutory conditions are met. This extension was confirmed at the EU level by the General Court’s judgment T-646/24 of 3 December 2025: the simplification rule of Art. 141 of the VAT Directive is also applicable in a four-party relationship, provided that the last three parties meet the conditions.

Practical relevance: For current supply chains, the simplification rule can be used much more flexibly than during the period in dispute. Nevertheless, the invoicing requirements (reference to the triangular transaction and reverse charge, valid VAT ID of the recipient, submission of the recapitulative statement) remain critical — failure to comply still results in the denial of the simplification.

External links

• https://findok.bmf.gv.at/
• https://www.ris.bka.gv.at/NormDokument.wxe?Abfrage=Bundesnormen&Gesetzesnummer=10004873&Paragraf=25
• https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02006L0112
• https://www.ris.bka.gv.at/Dokumente/BgblAuth/BGBLA_2022_I_108/BGBLA_2022_I_108.html
• https://www.vatupdate.com/?s=triangulation