In cross‑border EU transactions, businesses usually focus on logistics, the 0% VAT rate and transport documents. The VAT number of the customer is often treated as a formality – something that simply has to be on the invoice.

The judgment of the EU General Court of 25 February 2026 in case T‑638/24 shows very clearly that this approach can be risky. A seemingly technical mistake – using the wrong VAT number – can trigger two separate VAT obligations and lead to real cash‑flow costs. And both obligations may arise in the same country.

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What was the case about?

The case concerned an Austrian company purchasing goods from Austrian suppliers. The goods were physically transported directly from Austria to other EU Member States. From a business perspective, this looked like a standard intra‑EU supply and acquisition (ICS/ICA).

The problem was simple but costly. The buyer used its Austrian VAT number because it was not registered for VAT in the Member States where the goods actually ended up. As a result, the intra‑Community acquisitions were not reported in the countries of destination.

During a tax audit, the Austrian tax authorities imposed VAT consequences on both sides of the transaction:

  • Austrian suppliers were not allowed to apply the 0% VAT rate and correctly charged Austrian VAT on their invoices (even though, in substance, the supplies were intra‑EU).
  • The buyer was treated as having made a so‑called “number‑based” intra‑Community acquisition in Austria, under Article 41 of the VAT Directive, purely because it used an Austrian VAT number. At the same time, it was denied the right to deduct the VAT.

The taxpayer argued that this resulted in unacceptable double taxation and breached the principle of VAT neutrality. The Court disagreed.

What did the Court decide?

The Court confirmed that:

  • VAT due because it is shown on an invoice (Article 203 of the VAT Directive), and
  • VAT due by the buyer because an Austrian VAT number was used (Article 41 of the VAT Directive)

are two independent legal mechanisms. They serve different purposes and may apply at the same time – even if the combined effect is financially very painful for the taxpayer.

In simple terms, the fact that VAT was incorrectly charged by the supplier does not protect the buyer from the consequences of using the wrong VAT number.

The Court noted that VAT neutrality is preserved “in theory”, because the invoice can be corrected and VAT can be reclaimed from the supplier or, ultimately, from the tax authorities. In practice, however, such corrections are often time‑consuming, disputed or commercially unrealistic.

Why does this matter outside Austria – especially in Poland?

Polish tax authorities are particularly sensitive to the correct reporting of cross‑border transactions. In recent years, audits increasingly rely on data comparisons and automated checks rather than only on documents provided by taxpayers. This focus will only grow with the introduction of KSeF (mandatory structured e‑invoicing) and further reporting tools.

The Court’s judgment fits into a broader line of EU case law showing that errors in the VAT treatment of international transactions can be very expensive – even where there is no fraud and the business acted in good faith.

What is worth checking after this judgment?

From a practical perspective, the case is a strong warning signal. Businesses involved in cross‑border trade should review, in particular:

  • whether the VAT numbers used in transactions actually match the country where transport ends,
  • whether commercial, logistics and accounting teams understand the VAT consequences of using a “default” or head‑office VAT number,
  • whether internal procedures address situations where suppliers cannot apply the 0% VAT rate,
  • whether VAT returns, Intrastat, local SAF‑T files and (soon) KSeF data tell a consistent story.

Errors in this area are increasingly easy for tax authorities to spot. The T‑638/24 judgment is another reminder that it is better to identify and fix them internally – before a tax authority’s systems do it for you.

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