European Court T-773/25 (Finanzamt für Großbetriebe) – Judgment – Late “Reverse charge” invoices cannot activate the triangular simplification

Slide deck

On October 7, 2026. the General Court of the European Union has released its decision in the case T-773/25 (Finanzamt für Großbetriebe).

Context: Reference for a preliminary ruling — Taxation — Common system of VAT — Triangular intra-Community transactions — Article 42(a) of Directive 2006/112/EC — Optional simplification scheme for triangular transactions — Late issue of the invoice bearing the words ‘Reverse charge’

Summary

Facts: F GmbH used its Austrian VAT number for triangular supplies made between 2011 and 2014. The original invoices did not contain the required “Reverse charge” wording. In 2015, F GmbH issued new invoices containing that wording, amended its recapitulative statements and claimed a VAT adjustment.
Issue: Whether the triangular-transaction simplification can apply when the substantive invoicing requirement is fulfilled for the first time several years after the supplies took place.
Question to the Court: Does the first issue of a compliant invoice several years after the transaction trigger the legal consequences of the triangular simplification scheme with effect ex nunc, allowing a VAT adjustment in the current or a future tax period?
Decision: The General Court ruled that the late invoices do not activate the triangular simplification for the earlier supplies. The related VAT adjustment cannot be declared in the current or a future tax period. Consequently, the Court did not answer the second and third questions.
Argumentation: The words “Reverse charge” constitute a substantive condition for transferring VAT liability to the final customer. Adding that wording later is the first issue of a compliant invoice, not a correction. Allowing the simplification years later would retroactively change the applicable VAT treatment, undermine correct taxation in the Member State of destination and no longer achieve the scheme’s administrative-simplification objective.

Artciles in the EU VAT Directive

Article 40
The place of an intra-Community acquisition of goods shall be deemed to be the place where dispatch or transport of the goods to the person acquiring them ends.

Article 41
Without prejudice to Article 40, the place of an intra-Community acquisition of goods as referred to in Article 2(1)(b)(i) shall be deemed to be within the territory of the Member State which issued the VAT identification number under which the person acquiring the goods made the acquisition, unless the person acquiring the goods establishes that VAT has been applied to that acquisition in accordance with Article 40.
If VAT is applied to the acquisition in accordance with the first paragraph and subsequently applied, pursuant to Article 40, to the acquisition in the Member State in which dispatch or transport of the goods ends, the taxable amount shall be reduced accordingly in the Member State which issued the VAT identification number under which the person acquiring the goods made the acquisition.

Article 42
The first paragraph of Article 41 shall not apply and VAT shall be deemed to have been applied to the intra-Community acquisition of goods in accordance with
Article 40 where the following conditions are met:

(a) the person acquiring the goods establishes that he has made the intraCommunity acquisition for the purposes of a subsequent supply, within the territory of the Member State identified in accordance with Article 40, for which the person to whom the supply is made has been designated in accordance with Article 197 as liable for payment of VAT;
(b) the person acquiring the goods has satisfied the obligations laid down in Article 265 relating to submission of the recapitulative statement.

Article 141
Each Member State shall take specific measures to ensure that VAT is not charged on the intra-Community acquisition of goods within its territory, made in
accordance with Article 40, where the following conditions are met:

(a) the acquisition of goods is made by a taxable person who is not established in the Member State concerned but is identified for VAT purposes in another
Member State;
(b) the acquisition of goods is made for the purposes of the subsequent supply of those goods, in the Member State concerned, by the taxable person
referred to in point (a);
(c) the goods thus acquired by the taxable person referred to in point (a) are directly dispatched or transported, from a Member State other than that in which he is identified for VAT purposes, to the person for whom he is to carry out the subsequent supply;
(d) the person to whom the subsequent supply is to be made is another taxable person, or a non-taxable legal person, who is identified for VAT purposes in the Member State concerned;
(e) the person referred to in point (d) has been designated in accordance with Article 197 as liable for payment of the VAT due on the supply carried out by the taxable person who is not established in the Member State in which the tax is due.

Article 197

1. VAT shall be payable by the person to whom the goods are supplied when the following conditions are met:

(a) the taxable transaction is a supply of goods carried out in accordance with the conditions laid down in Article 141;
(b) the person to whom the goods are supplied is another taxable person, or a non-taxable legal person, identified for VAT purposes in the Member State
in which the supply is carried out;
(c) the invoice issued by the taxable person not established in the Member State of the person to whom the goods are supplied is drawn up in accordance
with Sections 3 to 5 of Chapter 3.

2. Where a tax representative is appointed as the person liable for payment of VAT pursuant to Article 204, Member States may provide for a derogation from
paragraph 1 of this Article.

Facts & Background

An external audit from 2010 to 2012 and an inspection from January 2013 to September 2014 revealed that the interested party failed to indicate triangular transactions on invoices, leading the tax authority to classify their activities as cumulative intra-Community acquisitions in Austria and disallow input tax deductions.
The interested party engaged in cross-border transactions with traders from Sweden and Denmark, treating these as intra-Community supplies and acquisitions, but did not properly document the triangular transaction process, resulting in tax complications.
The interested party later corrected invoices to indicate the existence of a triangular transaction and claimed that this adjustment met the necessary conditions for the simplification scheme under Austrian tax law, but the tax authority rejected these adjustments.
The Federal Finance Court ruled in favor of the interested party for the tax year 2015, asserting that the corrected invoices were effectively delivered to customers, despite previous shortcomings, but noted that the adjustments could only take effect from the date of correction, not retroactively.
The tax authority appealed, arguing that allowing retrospective corrections undermines the purpose of the triangular transaction scheme and complicates tax liability verification for transactions that occurred years prior, while the interested party contended that the adjustments should be recognized under the principle of fiscal neutrality.

Questions

1. Must Article 42(a) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax as amended by Council Directive 2010/45/EU of 13 July 2010 be interpreted as meaning that the first issuance of an invoice that is necessary for the application of the derogation for triangular
transactions but which is issued only some years after the supply was effected triggers the legal consequences of the administrative simplification scheme ex nunc?
2. If Question 1 is answered in the affirmative, does the ex nunc effectiveness of the first issuance of such an invoice depend on the person issuing the invoice having ensured taxation in accordance with the general conditions in the Member State of destination for the period of time preceding the issuance of that invoice?
3. If Question 1 is answered in the affirmative, in what form must the intermediary provide proof that the necessary invoice issued for the first time was in fact received by the end customer

AG Opinion

None

Decision

Article 42(a) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2010/45/EU of 13 July 2010, read in conjunction with Article 197(1)(c) of Directive 2006/112, as amended,

must be interpreted as meaning that

the issuance, several years after the completion of supplies which have already been the subject of invoices which do not contain the words ‘reverse charge’ referred to in Article 226(11a) of that directive, of invoices containing for the first time that information required for the purposes of the application of the derogation for triangular transactions does not trigger, for those supplies, the legal consequences of that administrative simplification scheme, since the amount of VAT adjustment in respect of those supplies cannot be declared for the current tax period or for a future tax period.

In other words, on the first question, the General Court ruled that Article 42(a) of Directive 2006/112, read in conjunction with Article 197(1)(c) of that directive, must be interpreted as meaning that the issue, several years after the completion of supplies already covered by invoices that did not contain the words “Reverse charge” referred to in Article 226(11a), of invoices containing that information for the first time does not trigger, in respect of those supplies, the legal consequences of the administrative simplification scheme for triangular transactions.

Consequently, the VAT adjustment amount relating to those supplies cannot be declared for the current tax period or for a future tax period.

In view of the answer to the first question, the General Court held that there was no need to answer the second and third questions.

Source

Curia

Argumentation

(Nature of the triangular-transaction simplification)

A triangular transaction involves a supplier identified for VAT purposes in a first Member State, an intermediate acquirer identified in a second Member State and a final acquirer identified in a third Member State, with the goods transported directly from the first Member State to the third Member State. Articles 42 and 141 of the VAT Directive establish an optional derogating scheme under which the intermediate acquirer may avoid VAT identification and reporting obligations in the Member State of destination, while the final acquirer becomes liable for VAT on the subsequent supply.

(Interaction between Articles 40, 41 and 42)

Article 40 determines the place of an intra-Community acquisition by reference to the Member State in which the goods are located when their transport ends. Article 41 provides a fallback rule under which the acquisition is also deemed to take place in the Member State that issued the VAT identification number used by the acquirer, unless taxation under Article 40 is established. Article 42 derogates from that fallback rule only where the conditions governing the triangular-transaction simplification are satisfied.

(Designation of the final customer as the person liable for VAT)

Under Article 42(a), the intermediate acquirer must establish that the acquisition was made for the purposes of a subsequent supply for which the recipient was designated as the person liable for VAT in accordance with Article 197. Article 197(1)(c), in turn, requires the invoice issued by the intermediate acquirer to comply with the invoicing provisions of the VAT Directive.

(Substantive nature of the “Reverse charge” wording)

Article 226(11a) requires the invoice to contain the words “Reverse charge” where the customer is liable for VAT. The General Court treated that wording as a substantive condition of the triangular-transaction simplification. Its purpose is to ensure that the final acquirer knows that it has been designated as the person liable for VAT and must account for the tax in the Member State of destination.

(First issue of the required invoice rather than correction)

Where the original invoice did not contain the reverse-charge wording, a later invoice bearing that wording does not merely correct an existing invoice. It constitutes the first issue of the invoice required to transfer liability for VAT to the final acquirer. The subsequent satisfaction of that substantive condition cannot have retroactive effect.

(No express deadline under Article 42)

Article 42(a) does not prescribe an express deadline for invoking the triangular-transaction simplification. The wording of Articles 42(a) and 141(e) establishes that the final acquirer must have been designated as liable for VAT before the scheme can apply, but does not specify the latest date on which the required invoice must be issued. The question therefore had to be resolved by examining the context and objectives of the simplification scheme.

(Administrative simplification objective)

The objective of Article 141 is to prevent the intermediate acquirer from having to register and submit VAT returns in the Member State of destination. That objective can no longer be achieved where the necessary invoice is issued only several years after the transactions. During the intervening period, the rules in Articles 40 and 41 remain applicable, and the corresponding VAT liability and registration, reporting and taxation obligations have already arisen.

(Correct taxation in the Member State of destination)

Articles 41 and 42 also seek to ensure that the intra-Community acquisition is taxed at the level of the final acquirer in the Member State of destination while avoiding double taxation. Applying the simplification scheme several years after the taxable transactions could jeopardise correct taxation, particularly where factual circumstances have changed, for example because the final acquirer has ceased to exist.

(Good faith and absence of revenue loss)

The General Court rejected the proposition that late application of the scheme could be allowed where the intermediate acquirer acted in good faith or where taxation in the Member State of destination was guaranteed. Verifying those conditions transaction by transaction would itself be inconsistent with the administrative simplification pursued by the derogating scheme.

(Difference from correction of VAT improperly invoiced)

The case did not concern correction of VAT that had been improperly charged on an invoice. It concerned the subsequent satisfaction of a substantive condition necessary to transfer VAT liability to the final acquirer. The case law permitting correction where the issuer acted in good faith or eliminated the risk of loss of tax revenue was therefore not applicable.

(Fiscal neutrality)

The principle of fiscal neutrality did not require the triangular-transaction simplification to become available on the basis of invoices issued several years later. National correction mechanisms relating to VAT improperly invoiced could not determine the interpretation of the distinct substantive requirements governing triangular transactions.

(Impermissible retroactive change in the taxation regime)

Allowing the intermediate acquirer to claim an adjustment in a current or future tax period would still alter retroactively the VAT treatment applicable to the earlier supplies. Although the adjustment would formally be declared in a later period, it would retrospectively change the legal position of both the intermediate acquirer and the final acquirer. That result would be incompatible with the rule that the first valid reverse-charge invoice cannot have retroactive effect.

(Consequences for the remaining questions)

Because the late invoices could not activate the triangular-transaction simplification, it was unnecessary to determine whether F GmbH had first taxed the transactions under the general rules in the Member States of destination or how actual receipt of the newly issued invoices by the final customers had to be demonstrated.

References to Other ECJ Case Law

C-580/16, Firma Hans Bühler – Cited for the principle that compliance with the conditions governing the triangular-transaction scheme, including the designation of the final acquirer as liable for VAT, is necessary for the intra-Community acquisition to be treated as taxed in accordance with Article 40 of the VAT Directive.
C-247/21, Luxury Trust Automobil – Cited for the definition and VAT treatment of triangular transactions; the relationship between Articles 40, 41, 42, 141, 197 and 226(11a) of the VAT Directive; the substantive nature and purpose of the “Reverse charge” wording; and the principle that issuing an invoice containing that wording for the first time is not a correction and cannot have retroactive effect.
C-138/12, Rusedespred – Cited for the principle that Member States must permit the correction of VAT improperly invoiced where the issuer demonstrates good faith or has eliminated, in good time, the risk of loss of tax revenue. The General Court distinguished that principle from the subsequent satisfaction of a substantive condition of the triangular-transaction simplification.
T-646/24, MS KLJUČAROVCI – Cited for the definition of triangular transactions, the nature of the derogating simplification scheme, the interaction between Articles 40, 41, 42 and 141 of the VAT Directive, and the objectives of ensuring taxation in the Member State of destination while avoiding double taxation.