Triangular transactions – an invoice error may prevent the VAT simplification
Failure to include the “reverse charge” wording on an invoice may have serious consequences for the VAT treatment of a triangular transaction. The EU General Court has confirmed that issuing new invoices with the correct wording several years later does not allow the simplification to be applied or the VAT position to be adjusted in a current or future period.
In its judgment of 7 October 2026 (T-773/25), the General Court of the European Union confirmed a strict approach to the conditions for applying the VAT simplification for intra-Community triangular transactions.
The case concerned a taxpayer carrying out chain transactions whose original invoices did not indicate that the final customer was liable to account for VAT. Several years later, new invoices containing the required “reverse charge” wording were issued and the relevant recapitulative statements were corrected.
“Reverse charge” as a substantive requirement
The General Court held that indicating on the invoice that the customer is liable for VAT is not merely a formal requirement. It constitutes one of the substantive conditions for applying the simplification for triangular transactions.
As a result, the missing wording cannot be effectively remedied several years later by issuing new invoices.
The Court also confirmed that:
- subsequently amending invoices and recapitulative statements does not allow the simplification to be applied retroactively,
- the resulting VAT adjustment cannot be reported in a current or future tax period,
- the taxpayer’s good faith does not justify applying the simplification where its substantive conditions were not fulfilled at the relevant time.
The judgment therefore continues the restrictive line of case law concerning triangular transactions, following, among others, the earlier CJEU judgment in Luxury Trust Automobil (C-247/21).
What does this mean for taxpayers?
In practice, an error in the wording of an invoice may prevent a transaction from benefiting from the simplification available for triangular transactions.
This may require the transaction to be settled under the general VAT rules applicable to chain transactions and may consequently result in additional VAT obligations.
Correctly identifying the transaction model and issuing compliant invoices at the time the transaction takes place is therefore crucial for VAT compliance and tax security.
Are you planning chain transactions or would you like to review their VAT treatment? Please contact Cezary Madeka or Łukasz Woźniak from the VAT team at Thedy & Partners.