Triangular transactions: a missing 'Reverse charge' mention cannot be fixed years later

In its judgment of 7 October 2026 (T-773/25, Finanzamt für Großbetriebe), the General Court of the European Union held that an intermediary cannot apply the triangulation simplification after the fact by issuing new invoices bearing the mention 'Reverse charge' years after the original supplies.

The General Court thereby goes a step further than Luxury Trust Automobil of 8 December 2022 (C-247/21). The Court of Justice had already held that such a correction has no retroactive effect. The General Court now also rules out that the new invoices make the simplification applicable from the moment they are issued.

F GmbH, an Austrian wholesaler of workwear, bought goods between 2011 and 2014 from suppliers in Sweden and Denmark, using its Austrian VAT number. The suppliers shipped the goods directly to F GmbH's customers in other Member States, and the goods never passed through Austria. The customers used the VAT number of the Member State of arrival. The transactions thus had all the features of intra-Community triangulation.

The problem lay in the invoicing. In its VAT returns, its EC Sales Lists and on its invoices, F GmbH had treated its sales as exempt intra-Community supplies. The invoices showed no VAT, but they also did not state that the transactions were triangular or that the final customer was liable for the VAT.

During an audit, the Austrian tax authorities found that, as a result, the conditions for the simplification were not met.

They applied the ordinary rules for chain transactions. This led to an additional intra-Community acquisition in Austria, based on the Austrian VAT number used, on which the VAT was not deductible.

In March 2015, F GmbH tried to put this right. It issued new invoices with the required mentions, corrected its EC Sales Lists for 2011 to 2014 and included a correction amount in its VAT return for March 2015 to neutralise the VAT previously due. The tax authorities refused to accept that correction.

The Bundesfinanzgericht, the Austrian first-instance tax court, found for the company. In its view, the new invoices could not have retroactive effect, but they could take effect from March 2015. On appeal by the tax authorities, the Verwaltungsgerichtshof referred that question for a preliminary ruling. The Court of Justice transferred the case to the General Court, which since 1 October 2024 has had jurisdiction over preliminary references in the field of VAT.

In Luxury Trust Automobil, the Court of Justice confirmed that the mention 'Reverse charge' is a substantive requirement for the simplification (Articles 42, 141, 197 and 226(11a) of the VAT Directive). The mention ensures that the final customer knows it must pay the VAT itself. An invoice that shows no VAT, but does not expressly state that the VAT is reverse charged, does not achieve that.

According to the Court, adding the mention afterwards is therefore not an ordinary invoice correction. It is the first issue of an invoice that meets the conditions of the simplification, and that invoice cannot have retroactive effect.

In her Opinion in Luxury Trust Automobil of 14 July 2022, Advocate General Kokott still left room for effect ex nunc, from the moment the correct invoice is brought to the final customer's attention. The General Court now rules out that possibility for invoices issued only years after the supplies.

Notably, Article 42 of the VAT Directive sets no deadline for issuing the invoice. According to the General Court, the wording only shows that the invoice bearing 'Reverse charge' must exist before the simplification can be applied, not by when it must be issued. The General Court therefore bases its decision mainly on the objectives of the simplification.

First, the simplification is meant to spare the intermediary from registering for VAT in the Member State of arrival of the goods. If the invoice is only put right years later, the safety-net charge in the Member State that issued the VAT number used, and the registration and filing obligations in the Member State of arrival, have already arisen. They do not disappear after the event.

Second, the simplification is meant to ensure that the VAT is properly levied on the final customer. That aim is also compromised when the invoices are amended years later: by then, the final customer may, for example, no longer exist. Moreover, the mention 'Reverse charge' must remove any uncertainty about who owes the VAT. According to the General Court, invoices issued years after the supplies are manifestly incompatible with that requirement.

Nor does the intermediary's good faith offer a way out. The European Commission had proposed allowing later application of the simplification where the intermediary acted in good faith or where taxation in the Member State of destination was secured, by analogy with Rusedespred (C-138/12). The General Court did not follow that proposal: such a test would require each transaction to be examined individually, which runs counter to the aim of simplification. The principle of fiscal neutrality does not lead to a different outcome either. Rusedespred concerns the adjustment of VAT invoiced in error; here, a substantive requirement is only met after the event, while the tax authorities correctly claimed the VAT.

The fact that the company only included the correction in a later VAT return does not change that assessment. The original VAT treatment, and with it the legal position of the final customer, would still be altered after the event. The General Court therefore concludes that the new invoices do not make the simplification applicable to the supplies concerned, and that the correction amount cannot be included in a current or later VAT return.

The Belgian VAT administration already incorporated Luxury Trust Automobil in Circular 2023/C/51 of 4 May 2023, which supplements Circular 2020/C/50. In it, the administration confirms that the mention 'btw verlegd' ('Reverse charge') is a substantive requirement and that its omission cannot be cured afterwards by adding the mention.

The new judgment is in line with that approach and also makes clear why a correction in a later VAT period offers no way out either when the invoices are only put right years later.

The financial consequences can be significant. Take a Belgian company that, using its Belgian VAT number, buys goods in Sweden and has them delivered directly to a German customer. If the simplification cannot be applied, the Belgian company must in principle account for an intra-Community acquisition in Germany, followed by a domestic supply subject to German VAT. This may trigger German VAT registration and filing obligations.

Because the company used its Belgian VAT number, Belgium may also tax an intra-Community acquisition under Article 25quinquies, § 3, first paragraph, of the Belgian VAT Code. That safety-net charge is not deductible, as the Court of Justice confirmed in X and fiscale eenheid Facet-Facet Trading of 22 April 2010 (joined cases C-536/08 and C-539/08). The company may therefore owe Belgian VAT on goods that never arrived in Belgium.

That Belgian VAT is not necessarily lost for good. In line with the second paragraph of Article 41 of the VAT Directive, Article 25quinquies, § 3, second paragraph, of the Belgian VAT Code provides for a reduction of the taxable amount where it is shown that the acquisition was subject to VAT in the Member State of arrival. The safety-net charge can thus in principle still be neutralised, subject to the applicable procedural rules and time limits.

This does require a correction under the ordinary VAT rules. Amending the invoices and EC Sales Lists after the event is not enough to bring the supplies within the simplification after all.

The judgment concerns a specific situation: supplies originally invoiced without the required mention, for which new invoices were issued only several years later. The General Court does not expressly address an error corrected very shortly after the original invoicing, for example before the VAT return is filed.

Caution is nevertheless warranted. The General Court's reasoning rests on the fact that the VAT obligations already arise at the time of the original transactions and that the final customer must know in good time that it is liable for the VAT.

We therefore recommend that businesses regularly carrying out triangular transactions get their invoicing right from the outset.