ECJ: late invoice cannot remedy VAT triangulation
ECJ: late invoice cannot remedy VAT triangulation
In its judgment of 7 October 2026 (Case T-773/25), the EU General Court has further clarified (and tightened) the conditions for applying the VAT simplification scheme for triangular transactions. The Court ruled that issuing an invoice containing the mandatory wording “Reverse charge” several years after a transaction cannot subsequently bring that transaction within the triangulation simplification.
What was the issue?
The case concerned an Austrian company involved in cross-border supplies of goods between three EU Member States. The company initially issued invoices without referring to the reverse charge and therefore did not meet all requirements for applying the VAT triangulation simplification. Several years later, it issued new invoices containing the required wording and sought to apply the simplification from that point onwards. The General Court rejected this approach.No retrospective or prospective remedy
Under the VAT Directive, the invoice issued by the intermediary in a triangular transaction must contain the wording “Reverse charge”. Referring to the earlier Luxury Trust Automobil judgment (see our earlier article in this respect: Importance of correct invoice statement in simplified triangulation confirmed by Court of Justice - BDO), the General Court reiterated that this constitutes a material condition for applying the simplification. Where that wording was absent from the original invoice, subsequently issuing an invoice containing it is therefore not simply a correction of an invoice. Importantly, the Court has now clarified that such a new invoice can neither apply the simplification retroactively nor activate it prospectively for the transaction concerned. The VAT consequences that arose when the original transaction took place cannot subsequently be changed by issuing a compliant invoice several years later.Why does this matter?
The judgment confirms a strict approach towards the EU triangulation simplification and the related invoicing formalities. Businesses cannot assume that all invoicing deficiencies can be corrected afterwards.In this respect, it is important to note that the Belgian VAT authorities already explicitly adopted the strict ruling of the ECJ Luxury Trust Automobil judgment (C-247/21) in their administrative guidelines on the subject. Given that the related financial risks can be severe (non-application of the simplification regime may lead to VAT registration requirements in foreign EU Member States, fines and late payment interests being imposed), companies involved in EU chain transactions should ensure from the outset that:
- all conditions for the triangulation simplification are met;
- the appropriate VAT identification numbers are used;
- invoices contain the mandatorily required invoicing references (e.g. “Simplified triangulation – Cocontracting Party designed as person liable for the payment of VAT – articles 141 and 197 Council Directive EU”) from the intermediary to the final client;
- the transactions are correctly included in the relevant VAT reporting; and
- ERP and invoicing systems are capable to distinguish triangular transactions from ‘ordinary’ intra-Community transactions.
BDO recommendation
This judgment builds on the earlier ECJ jurisprudence laid out in the Luxury Trust Automobil judgement and further limits the possibility of repairing incorrectly implemented triangular transactions.The practical message is therefore straightforward. For EU triangulation transactions, the correct VAT treatment should be built into the transaction and invoicing process from the start. Businesses with significant cross-border goods flows are recommended to review their VAT determination logic, invoice templates and controls around VAT identification numbers, particularly where ERP systems automatically classify chain transactions. Errors identified during a later VAT audit may no longer be capable of being remedied simply by issuing new invoices. BDO has extensive experience in assisting EU businesses in this matter. In case of any questions or remarks, please do not hesitate to reach out to: