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In case T 638/24 (Finanzamt Österreich / D GmbH), the Court of Justice of the European Union confirmed that using a VAT number from the wrong Member State can have significant financial consequences. The case illustrates how a single administrative mistake can lead to VAT being due in two different ways, even when the goods never arrive in the Member State whose VAT number was used. The Court makes clear that this outcome is fully consistent with EU VAT law, placing the risk squarely on the taxpayer.
The case: when the wrong VAT number becomes expensive
D GmbH, an Austrian company, purchased goods in Austria and had them shipped directly to other EU Member States. Normally, the Austrian supplier would apply the 0% rate for an intra Community supply, followed by an intra Community acquisition in the Member State of arrival by the customer. However, the customer D GmbH did not have a valid VAT number in the Member State of arrival. Instead, D GmbH provided its Austrian VAT number.
The suppliers decided to charge Austrian VAT. D GmbH believed that this VAT was deductible in its Austrian VAT return. However, the Austrian tax authorities argued that this was an intra-Community supply taxed at the 0% rate. The years in question predate the quick fixes (from 2020 onwards, it is a material requirement for the 0% rate that the customer has a valid VAT number that has not been assigned by the country of departure of the goods). The VAT on the invoice was therefore only due because it was included on the invoice as it was incorrectly charged. This incorrectly charged VAT is not deductible and must be recovered through an administrative procedure in a Member State.
The second effect: a number acquisition in Austria
Using the Austrian VAT number had another consequence. Under EU VAT rules, when a customer uses a VAT number from a particular Member State, that Member State assumes that an intra Community acquisition takes place there (number acquisition) - unless the customer proves that acquisition VAT was reported in the Member State of arrival. D GmbH could not provide such proof. As a result, Austria treated the transaction as a “number acquisition”: an intra Community acquisition triggered solely by the use of the Austrian VAT number, even though Austria was the departure country of the goods and not the country of arrival of the goods.
The Court confirmed that this is legally correct. The rules on the place of acquisition and the rules on VAT due because it is incorrectly charged on an invoice operate independently. The supplier’s VAT liability for incorrectly charged VAT (which is in principle not deductible for the customer) does not prevent the customer from also being liable for (number-)acquisition VAT in the country of departure.
Double taxation: legally acceptable, economically painful
The outcome is that both the supplier and the customer owe VAT in Austria. The supplier must pay VAT because he has charged it incorrectly (in principle not deductible for the customer), and the customer must pay VAT because he performs a number acquisition. Even if the supplier later corrects the invoice, the customer may still be liable for (number-)acquisition VAT in the meantime. The Court considers this compatible with the principles of neutrality and proportionality because, in theory, incorrectly charged VAT can be corrected. In practice, however, corrections can be slow, disputed, or refused in Member States.
Why this matters for businesses
This judgment highlights how sensitive cross border trade is to administrative details. Communicating to the supplier your wrong VAT number may seem minor, but it can trigger significant VAT liabilities. Businesses moving goods across borders must ensure they use the correct VAT number, obtain VAT registrations in the Member State of arrival when needed, and maintain robust evidence of the goods’ arrival. In a system where VAT liabilities in different Member States are interconnected, a single missing VAT number can expose the customer to unnecessary double VAT.
Situation after quick fixes
The years covered by the proceedings predate the quick fixes. From 1 January 2020, it is a material requirement to have a valid VAT number of the customer that has not been assigned by the country of departure of the goods. In our opinion, if, in a similar set of circumstances after the quick fixes, and the customer does not have a valid VAT number, the supplier will correctly charge VAT to the customer. This means that there does not appear to be any incorrectly VAT charged. This VAT charged should therefore be deductible for the customer. In practice, however, it is conceivable that the tax authorities of the various Member States could refuse this deduction.
The question of whether a number acquisition will take place after the quick fixes in a similar situation remains open. In view of an earlier Polish case before the Court of Justice (C-696/20), a number acquisition may not take place. However, this case was also decided before the quick fixes, so it cannot be ruled out that a number acquisition will still take place if a similar set of facts occurs from 2020 onwards.
