Intra-EU Acquisitions: The Risk of Double VAT Taxation

A recent preliminary ruling by the Court of Justice of the European Union (CJEU) in Case T-638/24 reaffirms that intra-Community acquisitions of goods remain subject to VAT even where the exempt intra-Community supply was incorrectly invoiced with VAT in the Member State of departure.

This case involved the Austrian company D GmbH and the Austrian tax authorities concerning the denial of input VAT deductions claimed for the years 2011 to 2015. These deductions related to Austrian VAT incorrectly charged by local suppliers on intra-Community supplies of goods dispatched to other Member States. At the same time, the corresponding purchases made by D GmbH were treated as intra-Community acquisitions subject to VAT but non-deductible in Austria, the company’s Member State of VAT registration, because it had used its Austrian VAT identification number without demonstrating taxation in the Member State of destination. The Austrian authorities therefore applied the “safety net” rule set out in Article 41 of Directive 2006/112/EC, as transposed into Austrian law.

Conclusion of the Advocate General (CJEU, 29 October 2025) :

1. Article 203 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that the application of that article, by reason of the invoicing, in error, of value added tax (VAT) for exempt intra-Community supplies, in the Member State in which dispatch or transport began, is unable to preclude the simultaneous taxation of the corresponding intra-Community acquisitions, in the same Member State, pursuant to Article 41 of that directive.

2. Article 41 of Directive 2006/112 must be interpreted as meaning that the question of the applicability of that provision is without prejudice to Article 68 of that directive, which determines, for intra-Community acquisitions, the chargeable event for VAT. According to that provision, that event occurs when the acquisition is made.

Although exempt intra-Community supplies are now conditional on the purchaser being identified for VAT in another Member State (pursuant to Directive 2018/1910), the CJEU’s conclusions of 29 October 2025 serve as a timely reminder of the fiscal risks still faced by businesses engaged in cross-border trade when transactions are not properly managed.

Main VAT risks highlighted:

• Non-deductibility of VAT wrongly charged by the supplier in the Member State of departure;
• VAT taxation of intra-Community acquisitions based on the economic substance of the transaction;
• Non-deductibility of VAT due by the purchaser in its own country of registration where no corresponding VAT number is held in the Member State of arrival.

In addition, declarative non-compliance penalties may apply, including:

• Failure to self-assess VAT on intra-EU acquisitions;
• Breaches of fiscal or statistical reporting obligations (EC Sales & Purchases Lists, INTRASTAT, etc.).

A real economic double charge

This case underscores the importance for EU businesses of securing their VAT identification numbers and accurately documenting the movement of goods. Even without a legal “double taxation”, a double economic burden may arise where VAT is wrongly invoiced in the country of departure, and the same transaction is taxed again as an intra-Community acquisition. In such cases, the company must seek a refund of the VAT wrongly paid to its supplier; a process that can be lengthy and complex, especially in cases of supplier insolvency or cross-border disputes. Timely invoice correction is therefore essential to preserve the right to deduction and avoid parallel taxation in two Member States.

Businesses involved in intra-EU trade should regularly audit:

• the consistency between invoices and the actual flow of goods
• the accuracy of the VAT identification numbers used
• and the correct reporting of intra-EU supplies and acquisitions in VAT listings.

BTOBNICE – your EU VAT compliance partner

BTOBNICE assists companies with VAT compliance in France and across the European Union:

• VAT scheme reviews
• intra-EU supply/acquisition audits
• documentary verification
• support with invoice correction and recovery of wrongly charged VAT

For further information or operational support:contact@btobnice.com

Source : Case T‑638/24