On 25 February 2026, the EU General Court ruled in D GmbH (T-638/24) that the safety net in Article 41 of the VAT Directive still applies when a supplier has wrongly put VAT on its invoice.
The case
An Austrian company bought goods from Austrian suppliers and had them delivered to other Member States. It gave the suppliers its Austrian VAT number. The suppliers invoiced Austrian VAT, and the company deducted it.
The Austrian tax authority took a different view for the years 2011 to 2015. The purchases were intra-Community acquisitions, and the company had not shown that VAT had been applied in the Member State where the transport ended. Article 41 therefore placed the acquisitions in Austria. The supplies were exempt, so the VAT on the invoices had been charged in error, but the suppliers still owed it under Article 203. The company also lost its deduction of that VAT.
The ruling
EU law and the principles of neutrality and proportionality do not stand in the way. Liability under Article 203 does not arise because a transaction is taxed. It arises simply because VAT appears on the invoice, and it can in principle be corrected.
This is the difference from C-696/20. In that case, a supply had been treated definitively as taxable and the taxable person could not deduct the input VAT.
What to check
- Use a VAT number from the Member State of arrival for intra-Community purchases. A number from the Member State of departure brings Article 41 into play.
- If you do end up there, the way out is to show that VAT was applied in the Member State of arrival. The taxable amount is then reduced accordingly.
- If VAT was invoiced in error on an exempt supply, have the invoice corrected. Do not assume that you can deduct it.
mr. J. el Khalfioui LL.M.