Commentary

V3.388A Simplification—chains of supply and triangulation

Part V3 Supplies, acquisitions and imports

V3.388A Simplification—chains of supply and triangulation

V3.388A Simplification—chains of supply and triangulation

This paragraph looks at simplification measures which arise out of particular circumstances associated with acquisitions. The paragraph should be read in conjunction with the other paragraphs in this Division on the subject of acquisitions and, in particular, V3.361 which explores the meaning of acquisition, the identity of the acquirer and the charge to acquisition VAT. The simplifications described below relate to:

  1.  

    •     chain transactions

  2.  

    •     triangular transactions

Simplification—movements of goods in supply chains

Tripartite movements and cross-border 'quick-fixes' (from 1 January 2020)

Significant confusion can arise when seeking to establish the VAT status of cross-border movements of goods under tripartite arrangements (ie where there is a supply from A in member state 1 to B in member state 2, to C in member state 3, but the goods move direct from member state 1 to member state 3). Given that only one supply in the chain can be regarded as the intra-Community supply (ie the supply which is zero-rated, but acquisition VAT is accounted for by the recipient), the question arises as to which supply in the chain is the intra-Community supply. This problem also arises where, for example, A and B are registered in the same member state. Is there a domestic supply in that member state from A to B followed by an intra-Community supply from B to C? Or is there an intra-Community supply from A to B followed by a domestic supply from B to C in the member state of destination?

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