The EU General Court confirmed in case T-638/24 on 25 February 2026 that safety-net acquisition VAT under Article 41 of the EU VAT Directive applies alongside VAT liability for unduly charged amounts under Article 203, rejecting arguments that this constitutes prohibited double taxation.
Case Facts and Court Reasoning
Between 2011 and 2015, German company D GmbH purchased goods from Austrian suppliers using its Austrian VAT-ID, with goods transported to other Member States. Austrian suppliers incorrectly charged VAT on what should have been VAT-exempt intra-Community supplies. Austrian tax authorities classified the supplies as exempt but applied safety-net acquisition VAT due to the use of the Austrian VAT-ID.
The General Court distinguished the case from ECJ ruling C-696/20, which found double taxation where intra-Community supplies were not VAT-exempt. Here, the Court held that Article 203 creates a separate VAT liability for incorrectly stated VAT amounts that does not constitute taxation of the underlying transaction, while the intra-Community supply remains exempt.
Pre-2020 Legal Framework
The ruling applies to periods before 2020, when using a VAT-ID from another Member State was not a material condition for VAT exemption of intra-Community supplies. Since 2020, Article 138(1)(b) requires acquirers to use their VAT-ID from another Member State to qualify for exemption, potentially making the C-696/20 double taxation principle applicable to similar future cases.
The Court noted that pending case T-689/25 may clarify whether the VAT-ID requirement constitutes a material condition for exemption under the post-2020 framework, which could affect whether safety-net acquisition VAT applies in similar circumstances going forward.
Context
The judgment clarifies the interaction between safety-net acquisition VAT and unduly charged VAT provisions, confirming that both can apply simultaneously without breaching EU double taxation principles. The decision reinforces the preventive function of Article 41 in ensuring intra-Community acquisitions face taxation at least once, while maintaining the separate corrective mechanism under Article 203 for supplier invoicing errors.