Let's take an example
Your company (B) based in Germany purchases goods from a Czech supplier (A) and resells the goods to a Belgian client (C). The goods are transported directly from the Czech Republic to Belgium by the Czech supplier himself (no stop in Germany).
This is a so-called “supply chain transaction” for VAT purposes, a chain of sales involving at least 3 companies (A, B, C) with only one physical movement of goods.
The Expert's eye
Companies involving in chain transactions must pay attention to the following issues:
- Verify the exact flow of goods and invoices in order to determine the correct VAT treatment of the chain transaction and possible VAT obligations of the company in another Member State;
- Check how the triangulation simplification scheme measures are applicable in the country of arrival of the goods and which conditions should be fulfilled in this respect.
- In case the triangulation simplification scheme is not applicable, proceed to the local VAT registration;
- Check whether or reverse charge is applicable for the subsequent domestic sale to the client.