VAT

Published on Nov 3, 2026 by LPG

Reverse charge invoicing in triangular transactions

In an EU triangular transaction, the VAT treatment of the whole chain depends on what the intermediary writes on its invoice. The General Court judgment of 7 October 2026 confirms that this wording cannot be supplied after the event.

A “Reverse charge” mention added several years after the supplies does not bring them within the simplification. The related adjustment cannot be declared in the current VAT period or in a later one either1.

The Court of Justice had already refused, in 2022, any retroactive correction of an invoice lacking the mention2.

Triangular transactions (two sales with only one transport)

To define the triangular transactions, imagine three taxable persons, each identified for VAT in a different Member State. A supplier (A) sells goods to an intermediary (B), which sells the same goods on to a final customer (C).

Only one transport takes place as the goods leave A's Member State and go straight to C's Member State, without ever physically reaching and going through B.

The intermediary's exposure under the default rules

Without the simplification, B makes an intra-Community acquisition in the Member State where the goods arrive3. B then has to register for VAT in that Member State and pay the tax there.

A second exposure exists. The Member State that issued the VAT number quoted by B for the purchase may tax the same acquisition until B proves that it was taxed in the Member State of arrival4.

What the simplification regime changes

The simplification is optional. When it is used, B's acquisition is not subject to VAT in the Member State of arrival5, and C becomes the person liable for the VAT on B's supply6.

B's acquisition is also deemed to have been taxed in the Member State of arrival7.

This presumption shields B from taxation in the Member State of its VAT number.

Conditions of the simplification regime

The three businesses must be identified for VAT in three different Member States, and B must not be established in the Member State of arrival8.

The presumption also rests on proof. B must demonstrate that its acquisition was followed by a supply for which C was designated as liable for the tax. B must also have complied with its obligations to file the recapitulative statement9.

Invoice wording

The “Reverse charge” mention (“Autoliquidation” in French) tells the customer that the supplier has charged no VAT and that the customer must account for it. Any invoice on which the customer is the person liable for the tax must carry it10.

A cross-border transaction does not call for the mention as such. The wording depends on the nature of the transaction.

Transaction Wording on the invoice
Intra-Community supply of goods, exempt where the legal conditions are met No VAT in principle, and a reference to the exemption11
Services between taxable persons (B2B) under the general rule, with a supplier not established in the Member State where VAT is due “Reverse charge”, the customer being liable for the VAT12
Supply from B to C under the triangulation simplification “Reverse charge”, mandatory since B designates C as liable for the VAT

For its part, B charges no VAT of the Member State of arrival. It reports the transaction in its VAT returns as well as in its recapitulative statement13.

A reference to a triangular transaction may appear on the invoice to show which regime applies. It cannot stand in for the “Reverse charge” mention14, which Luxembourg VAT law makes compulsory15.

The Finanzamt für Großbetriebe dispute

Between 2011 and 2014, an Austrian company purchased goods in Sweden and Denmark and had them delivered directly to its customers in other Member States. Its invoices said nothing about a triangular transaction or the reverse charge, and the tax authority denied the simplification.

In 2015, the company issued fresh invoices bearing the mention and recorded the adjustment in its VAT return for March 2015. The referring court sought to know whether those invoices could take effect at least from their date of issue16.

Reasons given by the General Court

The reasoning builds on several findings17. The first is that the mention forms part of the substance of the simplification and is not a mere formality18.

It follows that the 2015 invoices did not correct anything. They were the first invoices to satisfy the requirement, and such an invoice has no retroactive effect.

The supplies had already generated obligations, including registration and payment of VAT in the Member State of arrival. Those obligations could not be wiped out after the event.

Shifting the liability to C years later could also put taxation in the Member State of arrival at risk, for example where C has disappeared in the meantime. An effect confined to the future would not solve the problem, since it would still alter the treatment of past supplies and C's legal position.

Lastly, the outcome cannot turn on B's good faith or on evidence that VAT was in fact paid in the Member State of arrival. The Court declined any such case-by-case assessment.

Consequences for intermediaries

B's invoice has to carry the “Reverse charge” mention from the moment it is issued.

Where it does not, the ordinary rules govern the supplies.

B must register and pay VAT in the Member State of arrival, and the Member State of its VAT number may tax the acquisition until taxation in the Member State of arrival is proven.

Reissuing the invoices several years later does not repair the omission, even with an adjustment in a subsequent VAT return.

Last but not least, the judgment does not decide the case of an invoice completed shortly after its issue

 

 

  1. General Court of the European Union, Case T-773/25 of 7 October 2026, Finanzamt für Großbetriebe, paragraph 50.
  2. CJEU, Case C-247/21 of 8 December 2022, Luxury Trust Automobil, paragraphs 61 and 62.
  3. Article 40 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (VAT Directive) places the intra-Community acquisition where dispatch or transport of the goods ends.
  4. Article 41 of the VAT Directive provides for this taxation.
  5. Article 18(4) of the amended law of 12 February 1979 on value added tax (LVL) provides that this acquisition is not subject to VAT where Luxembourg is the Member State of arrival.
  6. Article 61(2) LVL governs the designation of the final customer as the person liable for VAT.
  7. Article 18ter(2), second subparagraph, LVL lays down this presumption.
  8. Article 18(4) LVL sets these conditions where Luxembourg is the Member State of arrival. It refers to an intermediary neither established nor identified for VAT in Luxembourg but identified in another Member State, and also admits as final customer a non-taxable legal person identified for VAT.
  9. Article 42 of the VAT Directive and Article 18ter(2), second subparagraph, LVL set out these two requirements.
  10. Article 226, point (11a), of the VAT Directive requires this mention.
  11. Article 226, point (11), of the VAT Directive requires this reference.
  12. Articles 44 and 196 of the VAT Directive determine the place of supply of these services and make the customer liable for VAT.
  13. Articles 250(1) and 265 of the VAT Directive lay down these two obligations, which Articles 64(1) and 64bis(1) LVL transpose.
  14. CJEU, Case C-247/21 of 8 December 2022, Luxury Trust Automobil, paragraphs 51 and 56.
  15. Article 63(8), point 14°, LVL requires this mention.
  16. General Court of the European Union, Case T-773/25 of 7 October 2026, Finanzamt für Großbetriebe, paragraphs 13 to 23.
  17. General Court of the European Union, Case T-773/25 of 7 October 2026, Finanzamt für Großbetriebe, paragraphs 31 to 50.
  18. CJEU, Case C-247/21 of 8 December 2022, Luxury Trust Automobil, paragraphs 49 and 61. General Court of the European Union, Case T-773/25 of 7 October 2026, Finanzamt für Großbetriebe, paragraph 31.

Contact us