Finanzamt Österreich v D GmbH (T-638/24)

Contents

Judgment of the General Court (Chamber giving preliminary rulings)25 February 2026^note(Reference for a preliminary ruling — Taxation — Common system of VAT — Place of intra-Community acquisitions of goods — Articles 40 and 41 of Directive 2006/112/EC — VAT liability — Article 203 of Directive 2006/112 — Principle of fiscal neutrality — Principle of proportionality — Intra-Community acquisitions made under a VAT identification number issued by the Member State of origin of the goods — VAT incorrectly entered on the invoices for the corresponding intra-Community supplies)In Case T‑638/24,REQUEST for a preliminary ruling under Article 267 TFEU from the Verwaltungsgerichtshof (Supreme Administrative Court, Austria), made by decision of 23 October 2024, received at the Court on 22 November 2024, in the proceedingsFinanzamt ÖsterreichvD GmbH,THE GENERAL COURT (Chamber giving preliminary rulings),composed, at the time of the deliberations, of S. Papasavvas, President, N. Półtorak, M. Sampol Pucurull, D. Petrlík (Judge-Rapporteur) and W. Valasidis, Judges,Advocate General: J. Martín y Pérez de Nanclares,Registrar: V. Di Bucci,having regard to the transmission of the request for a preliminary ruling to the General Court by the Court of Justice on 10 December 2024, pursuant to the third paragraph of Article 50b of the Statute of the Court of Justice of the European Union,having regard to the fact that the case concerns the area referred to in point (a) of the first paragraph of Article 50b of the Statute of the Court of Justice of the European Union and the fact that there is no independent question relating to interpretation within the meaning of the second paragraph of Article 50b of that statute,having regard to the written part of the procedure,after considering the observations submitted on behalf of:– the Austrian Government, by A. Posch, J. Schmoll and F. Koppensteiner, acting as Agents,– the European Commission, by P. Carlin and L. Hohenecker, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 29 October 2025,gives the following

Judgment

1This request for a preliminary ruling concerns the interpretation of Articles 40, 41 and 203 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1; ‘the VAT Directive’) and the principles of neutrality of value added tax (VAT) and proportionality.

2The request has been made in proceedings between the Finanzamt Österreich (tax authority, Austria; ‘the Tax Authority’) and D GmbH concerning the determination of VAT payable by that company for the tax years 2011 to 2015.

Legal framework

European Union law

3Article 2(1) of the VAT Directive stipulates:‘The following transactions shall be subject to VAT:…(b) the intra-Community acquisition of goods for consideration within the territory of a Member State by:(i) a taxable person acting as such;…’

4The first paragraph of Article 20 of the VAT Directive provides:‘“Intra-Community acquisition of goods” shall mean the acquisition of the right to dispose as owner of movable tangible property dispatched or transported to the person acquiring the goods, by or on behalf of the vendor or the person acquiring the goods, in a Member State other than that in which dispatch or transport of the goods began.’

5Article 40 of the VAT Directive states:‘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.’

6Article 41 of the VAT Directive is worded as follows:‘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.’

7Article 138(1) of the VAT Directive, before adoption of Council Directive (EU) 2018/1910 of 4 December 2018 (OJ 2018 L 311, p. 39), stipulated:‘Member States shall exempt the supply of goods dispatched or transported to a destination outside their respective territory but within the [European Union], by or on behalf of the vendor or the person acquiring the goods, for another taxable person […] acting as such in a Member State other than that in which dispatch or transport of the goods began.’

8Article 203 of the VAT Directive provides:‘VAT shall be payable by any person who enters the VAT on an invoice.’

Austrian law

9Paragraph 11(12) of the Umsatzsteuergesetz 1994 (Austrian Law on Turnover Tax) of 23 August 1994 (BGBl. 663/1994; UStG 1994) provides:‘Where the trader has, in an invoice for a supply of goods or services, separately stated an amount of tax for which he or she is not liable under this federal law as regards the transaction, he or she shall be liable for the amount stated in the invoice if he or she does not adjust that invoice accordingly in respect of the recipient of the supply of goods or services. …’

10Paragraph 3(8) of the annex to the UStG 1994, which contains provisions relating to the internal market, stipulates:‘An intra-Community acquisition shall be deemed to have been made within the territory of the Member State in which the goods are located at the time when their dispatch or transport ends. If the person acquiring the goods uses, in its dealings with the supplier, a turnover tax identification number issued to it by another Member State, the acquisition shall be deemed to have been made within the territory of that Member State, unless and until the person acquiring the goods proves that the acquisition has been taxed by the Member State referred to in the first sentence. …’

The dispute in the main proceedings and the questions referred for a preliminary ruling

11D is a limited liability company governed by Austrian law. The company acquired goods from suppliers established in Austria (‘the suppliers’), which it had delivered from that Member State to other Member States. In the context of those acquisitions, the company communicated its Austrian VAT identification number to the suppliers. The suppliers issued invoices to the company relating to the supply of those goods, including Austrian VAT. For the purposes of its tax returns, D took the view, first, that that VAT was deductible and, second, that the acquisitions at issue were not intra-Community acquisitions taxable in Austria.

12In the course of a tax audit of D, the Tax Authority issued VAT notices against the company for the tax years 2011 to 2015, which cover the transactions mentioned in paragraph 11 above. That authority found that those transactions constituted intra-Community acquisitions of goods within the meaning of the first paragraph of Article 20 of the VAT Directive. The Tax Authority found that, for the purposes of those transactions, D had used its Austrian VAT identification number and that it had not shown that VAT had been applied to those transactions in the Member State in which the dispatch or transport of the goods ended. Therefore those acquisitions were taxable in Austria, in accordance with the provision implementing Article 41 of the VAT Directive, that is, Paragraph 3(8) of the annex to the UStG 1994, which contains provisions relating to the internal market. Furthermore, the Tax Authority found that the corresponding intra-Community supplies were exempt from VAT and that, consequently, the suppliers had incorrectly invoiced that tax for those supplies. However, under Paragraph 11(12) of the UStG 1994, which implements Article 203 of the VAT Directive, the suppliers are liable for VAT. In that regard, the Tax Authority denied D the right to deduct the VAT entered on the invoices at issue as input tax.

13On 24 November 2020, the Bundesfinanzgericht (Federal Finance Court, Austria) dismissed the action brought by D against the tax notices mentioned in paragraph 12 above.

14Hearing an appeal on a point of law (Revision) brought by D, the Verwaltungsgerichtshof (Supreme Administrative Court, Austria), which is the referring court, annulled the decision of the Bundesfinanzgericht (Federal Finance Court) of 24 November 2020 and referred the case back to that court as it took the view that the transactions at issue were not taxable on the basis of Paragraph 3(8) of the annex to the UStG 1994, which contains provisions relating to the internal market.

15By decision of 18 October 2022, the Bundesfinanzgericht (Federal Finance Court) upheld the action brought by D and, referring to the judgment of 7 July 2022, Dyrektor Izby Skarbowej w W. (Incorrect classification of chain transactions) (C‑696/20, EU:C:2022:528), ruled that D had not made any intra-Community acquisitions in Austria merely on account of its having used its Austrian VAT identification number for the purposes of the transactions at issue.

16The Tax Authority brought an appeal on a point of law (Revision) before the referring court. The latter has doubts as to the interpretation of Articles 40, 41 and 203 of the VAT Directive and of the principles of neutrality of VAT and proportionality. The referring court is uncertain whether those articles and principles prevent the taxation in Austria of the intra-Community acquisitions at issue on the basis of the rule laid down in Paragraph 3(8) of the annex to the UStG 1994, which contains provisions relating to the internal market, where a tax liability exists in that Member State in relation to the corresponding intra-Community supplies as a result of VAT having been incorrectly entered on the invoices, pursuant to Paragraph 11(12) of the UStG 1994, which implements Article 203 of that directive.

17In that regard, the referring court has doubts as to whether the solution adopted in the judgment of 7 July 2022, Dyrektor Izby Skarbowej w W. (Incorrect classification of chain transactions) (C‑696/20, EU:C:2022:528) can be transposed to the case in the main proceedings. Contrary to the case that gave rise to that judgment, the VAT relating to the supplies to D is payable, not because the Tax Authority regarded those supplies as non-exempt supplies, but because Austrian VAT was incorrectly entered on the invoices at issue. Furthermore, that tax liability is not definitive, on the ground that Paragraph 11(12) of the UStG 1994 allows suppliers to adjust incorrect invoices, at any time, even if the year during which those invoices were issued is barred by limitation.

18In those circumstances the Verwaltungsgerichtshof (Supreme Administrative Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:(1) Do Articles 40, 41 and 203 of [the VAT Directive] as well as the principles of proportionality and neutrality preclude the application of a national provision (second sentence of [Paragraph] 3(8) of the [annex to the UStG 1994, which contains provisions relating to the internal market], whereby an acquisition is deemed to have been effected in the territory of the Member State whose VAT identification number was used by the person acquiring the goods until the person acquiring the goods establishes that the acquisition was taxed in the Member State in which the goods are located at the end of the transport or dispatch in those cases where the intra-Community acquisition is accompanied by an intra-Community supply which was treated in Austria as an exempt supply but where, because Austrian VAT is entered on the invoice, there is a tax liability for that supply on the basis of the invoice issued?(2) If Question 1 is answered in the affirmative, does the removal, as a result of a subsequent adjustment of the invoice by the issuer, of the VAT wrongly entered on the invoice relating to the exempt intra-Community supply give rise to an intra-Community acquisition within the meaning of Article 41 of the VAT Directive and, if so, at what point in time is that intra-Community acquisition [deemed to have been] made?’

Consideration of the questions referred

The first question

19By its first question, the referring court asks, in essence, whether Articles 40, 41 and 203 of the VAT Directive and the principles of neutrality of VAT and proportionality must be interpreted as precluding the application of national legislation which applies VAT to an intra-Community acquisition in the Member State in which dispatch or transport of the goods began, on the ground that the person acquiring the goods made that acquisition under the VAT identification number issued by that Member State, where such an acquisition results from an intra-Community supply exempt from VAT for which there is a tax liability in that Member State pursuant to the rule set out in Article 203 of that directive, as a result of VAT having been incorrectly invoiced for that supply.

20As a preliminary point, it should be pointed out that intra-Community acquisitions of goods, in principle, constitute transactions which are subject to VAT, in accordance with Article 2(1)(b) of the VAT Directive.

21Under Article 40 of the VAT Directive, the place of an intra-Community acquisition of goods is deemed to be in the Member State in which the goods are located when dispatch or transport to the person acquiring them ends (‘the Member State of arrival’).

22However, where the person acquiring the goods made the intra-Community acquisition under a VAT identification number issued by a Member State other than the Member State of arrival (‘the Member State of identification’), the place of that acquisition, in accordance with the first paragraph of Article 41 of the VAT Directive, is deemed to be within the territory of the Member State of identification, unless the person acquiring the goods establishes that VAT has been applied to that acquisition in the Member State of arrival.

23In the circumstances of the case in the main proceedings – which predate the introduction of Article 138(1)(b) of the VAT Directive by Directive 2018/1910 – the first paragraph of Article 41 of the VAT Directive is to apply also where the Member State that relies on that provision to apply VAT to an intra-Community acquisition of goods, as the Member State of identification, is the Member State in which the dispatch or transport of the goods began (‘the Member State of departure’) (judgment of 7 July 2022, Dyrektor Izby Skarbowej w W. (Incorrect classification of chain transactions), C‑696/20, EU:C:2022:528, paragraph 43).

24It should also be pointed out, as regards the context of Article 41 of the VAT Directive, that, under the general scheme of that directive, the corollary of an intra-Community acquisition taxed in the Member State of arrival or the Member State of identification is an intra-Community supply that is exempt in the Member State of departure under Article 138 of the VAT Directive (see, to that effect, judgment of 7 July 2022, Dyrektor Izby Skarbowej w W. (Incorrect classification of chain transactions), C‑696/20, EU:C:2022:528, paragraph 51). The exemption of an intra-Community supply corresponding to an intra-Community acquisition enables double taxation and, therefore, infringement of the principle of fiscal neutrality inherent in the common system of VAT, to be avoided (judgment of 27 September 2007, Teleos and Others, C‑409/04, EU:C:2007:548, paragraph 25).

25Moreover, the rule laid down in Article 41 of the VAT Directive seeks to ensure that a given intra-Community acquisition is subject to tax. It also has the aim to prevent double taxation in respect of the same acquisition (see judgment of 7 July 2022, Dyrektor Izby Skarbowej w W. (Incorrect classification of chain transactions), C‑696/20, EU:C:2022:528, paragraph 41 and the case-law cited).

26In the present case, it is apparent from the order for reference that the Tax Authority treated the intra-Community supplies at issue in the main proceedings as transactions exempt from VAT. Nevertheless, that authority applied the rule set out in Article 203 of the VAT Directive to those supplies, on the ground that VAT was incorrectly entered on the invoices for those supplies.

27In that regard, it is apparent from Article 203 of the VAT Directive that VAT is payable by any person who enters the VAT on an invoice.

28That person is liable to pay the VAT entered on an invoice independently of any obligation to pay it on account of there being a transaction subject to VAT (see judgment of 11 April 2013, Rusedespred, C‑138/12, EU:C:2013:233, paragraph 23 and the case-law cited).

29Article 203 of the VAT Directive seeks to eliminate the risk of loss of tax revenue which the right of deduction provided for in that directive might entail. That provision therefore applies where VAT has been invoiced incorrectly and there is a risk of loss of tax revenue on account of the fact that the recipient of the invoice in question has a right to deduct such VAT (judgment of 8 December 2022, Finanzamt Österreich (VAT invoiced incorrectly to final consumers), C‑378/21, EU:C:2022:968, paragraphs 20 and 21).

30However, Article 203 of the VAT Directive does not cover situations in which the VAT entered on the invoice is correct to the effect that it corresponds to a transaction that is actually taxable pursuant to another provision of that directive (see, to that effect, judgment of 8 December 2022, Finanzamt Österreich (VAT invoiced incorrectly to final consumers), C‑378/21, EU:C:2022:968, paragraphs 22 and 23).

31It follows from the foregoing that Articles 41 and 203 of the VAT Directive are each subject to their own conditions for application and pursue their own specific purpose. Thus, provided that the conditions for their application are satisfied, there is nothing in those provisions that precludes their simultaneous application to an intra-Community acquisition and, as a result of VAT having been incorrectly invoiced, to an exempt intra-Community supply, respectively. Similarly, there is nothing in the other provisions of the VAT Directive that precludes such simultaneous application of Articles 41 and 203 of that directive.

32As concerns the principles of neutrality of VAT and proportionality, it should be pointed out that measures adopted by the Member States in order to ensure the correct levying and collection of the tax and the prevention of tax evasion must, in accordance with the principle of proportionality, not go further than is necessary to attain the objectives thereby pursued and may not therefore be used in such a way that they would have the effect of undermining the neutrality of VAT, which is a fundamental principle of the common system of VAT established by the relevant EU law (see, to that effect, judgment of 7 July 2022, Dyrektor Izby Skarbowej w W. (Incorrect classification of chain transactions), C‑696/20, EU:C:2022:528, paragraph 54).

33The principle of neutrality of VAT is meant to relieve the taxable person entirely of the burden of VAT in the course of its economic activities. The common system for VAT therefore ensures that all economic activities, whatever their purpose or results, provided that they are, in principle, themselves subject to VAT, are taxed in a wholly neutral way (judgment of 2 July 2020, Terracult, C‑835/18, EU:C:2020:520, paragraph 25).

34In that regard, it is true that the recipient of an invoice on which VAT was incorrectly entered is not entitled to deduct that tax which is payable under Article 203 of the VAT Directive, as the right to deduct VAT invoiced is linked, as a general rule, to the actual performance of a taxable transaction, whereas under Article 203 VAT is payable independently from such a transaction (see, to that effect, judgment of 31 January 2013, Stroy trans, C‑642/11, EU:C:2013:54, paragraph 30 and the case-law cited).

35At the same time, VAT payable under Article 203 of the VAT Directive may be corrected, in the light of the purpose of that provision as described in paragraph 29 above, as, in order to ensure the neutrality of VAT, the Member States have an obligation to provide, in their domestic legal systems, for the possibility of correcting any tax improperly invoiced in the case where the issuer of the invoice shows that he or she acted in good faith or where he or she has, in due course, wholly eliminated the risk of any loss of tax revenue (see, to that effect, judgment of 8 May 2019, EN.SA., C‑712/17, EU:C:2019:374, paragraph 33 and the case-law cited).

36Observance of the principle of neutrality of VAT is ensured inter alia by a system in which, first, the supplier who has paid the VAT to the tax authorities in error may seek to be reimbursed and, second, the person acquiring goods may bring a civil law action for recovery of the sums paid but not due against that supplier which failed to return the reimbursed VAT, as that system enables the person acquiring the goods who bore the tax invoiced in error to obtain a reimbursement of the sums paid in error. If the refund of the VAT becomes impossible or excessively difficult, in particular in the case of the insolvency of the supplier, the principles of neutrality of VAT and effectiveness require the Member States to provide for the instruments necessary to enable the person acquiring the goods to recover the VAT which has been invoiced and paid in error, in particular by addressing its application for reimbursement to the tax authorities directly (see, to that effect, judgment of 13 October 2022, HUMDA, C‑397/21, EU:C:2022:790, paragraphs 21 and 22 and the case-law cited).

37In that regard, the referring court stated that Austrian law provides for the possibility of correcting VAT invoiced in error by adjusting incorrect invoices and that such an adjustment may be done at any time, even if the year during which those invoices were issued is barred by limitation.

38In those circumstances, taxation of intra-Community acquisitions in the Member State of identification in accordance with Article 41 of the VAT Directive, assuming that the corresponding intra-Community supplies are exempt from VAT and there is a tax liability in that Member State in relation to those supplies pursuant to the rule set out in Article 203 of that directive, is not contrary to the principles of neutrality of VAT and proportionality.

39Consequently, in a situation such as that in the main proceedings where the Member State of identification corresponds to the Member State of departure, the application of the rule set out in Article 203 of the VAT Directive to intra-Community supplies exempt from VAT in the Member State of departure does not preclude taxation of the corresponding intra-Community acquisitions, in the same Member State, in accordance with Article 41 of that directive.

40The finding in paragraph 39 above is not called into question by the judgment of 7 July 2022, Dyrektor Izby Skarbowej w W. (Incorrect classification of chain transactions) (C‑696/20, EU:C:2022:528, paragraph 55), where the Court held that the application of the rule set out in Article 41 of the VAT Directive, in the Member State of identification, to an intra-Community acquisition of goods that results from an intra-Community supply of goods which was treated, in that Member State, as a non-exempt supply gives rise to additional taxation that does not comply with the principles of proportionality and neutrality of VAT.

41As it follows in particular from paragraphs 49, 52 and 53 of the judgment of 7 July 2022, Dyrektor Izby Skarbowej w W. (Incorrect classification of chain transactions) (C‑696/20, EU:C:2022:528), the finding of the Court in that judgment was based on the referring court’s finding that, first, the intra-Community supply in question in the main proceedings had been treated definitively by the national tax authority as a transaction subject to VAT – and not as a transaction exempt from that tax in accordance with Article 138 of the VAT Directive – and, second, the taxable person had not been able to deduct input VAT in relation to that supply. In that regard, the Court observed inter alia that, given that the intra-Community supply of goods is a non-exempt supply in the Member State of departure, there was no risk of tax avoidance, so that the application of tax to that transaction in that Member State on the basis of the rule laid down in Article 41 of the VAT Directive ran counter to the objectives pursued by that provision, as set out in paragraph 25 above.

42By contrast, in the case in dispute in the main proceedings, the VAT relating to the intra-Community supplies at issue is not payable because those supplies are non-exempt supplies, but under the rule set out in Article 203 of the VAT Directive.

43As the Advocate General observed in point 54 of his Opinion, the incurrence of tax liability under Article 203 of the VAT Directive by the supplier of intra-Community supplies who has incorrectly invoiced VAT does not equate to the levying of VAT for those supplies. As has been pointed out in paragraph 34 above, the tax liability under Article 203 of that directive is incurred not on the basis of a transaction subject to VAT but simply because that VAT has been entered on the invoice in question.

44Furthermore, in the judgment of 7 July 2022, Dyrektor Izby Skarbowej w W. (Incorrect classification of chain transactions) (C‑696/20, EU:C:2022:528), the intra-Community supply at issue in the main proceedings had been treated once and for all by the relevant tax authority as a transaction subject to VAT, whereas in the situation covered by the present question referred for a preliminary ruling the tax liability incurred under Article 203 of the VAT Directive may, in principle, be corrected.

45In the light of the foregoing, the answer to the first question referred is that Articles 40, 41 and 203 of the VAT Directive and the principles of neutrality of VAT and proportionality must be interpreted as not precluding the application of national legislation which applies VAT to an intra-Community acquisition in the Member State in which dispatch or transport of the goods began, on the ground that the person acquiring the goods made that acquisition under the VAT identification number issued by that Member State, where such an acquisition results from an intra-Community supply exempt from VAT for which there is a tax liability in that Member State pursuant to the rule set out in Article 203 of that directive, as a result of VAT having been incorrectly invoiced for that supply.

The second question

46In the light of the answer given to the first question, there is no need to examine the second question.

Costs

47Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

Operative part

On those grounds,THE GENERAL COURT (Chamber giving preliminary rulings)hereby rules: Articles 40, 41 and 203 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, and the principles of neutrality of value added tax (VAT) and proportionality,must be interpreted as not precluding the application of national legislation which applies VAT to an intra-Community acquisition in the Member State in which dispatch or transport of the goods began, on the ground that the person acquiring the goods made that acquisition under the VAT identification number issued by that Member State, where such an acquisition results from an intra-Community supply exempt from VAT for which there is a tax liability in that Member State pursuant to the rule set out in Article 203 of that directive, as a result of VAT having been incorrectly invoiced for that supply.

Delivered in open court in Luxembourg on 25 February 2026.