Intra-community triangular business

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The intra-Community triangular transaction (in Austria only three-way deal , English triangular transaction ) is to simplify regulation of the European VAT legislation . It is applicable to intra-Community chain transactions and reduces the administrative burden for the medium-sized entrepreneur involved. The aim is to indirectly promote trade in the European internal market .

The legal intra-Community triangular business is to be distinguished from illegal triangular transactions and carousel business .

meaning

The European VAT law is essentially based on the VAT System Directive (VAT Directive). However, it only provides the framework within which the legislators of the individual member states have to design their national VAT law. The regulations on intra-Community triangular transactions, in particular in Art. 141 and 197 of the VAT Directive, leave so much scope for implementation that the national regulations of the member states differ significantly in some points.

In German law, the intra-Community triangular transaction is implemented in Section 25b of the Value Added Tax Act (UStG), in Austrian law in Article 25 of the Internal Market Regulation (BMR).

requirements

The simplification is applicable when a chain transaction with a movement of goods between two member states of the European Union is carried out. In principle, the simplification rule is only applicable if the chain transaction is carried out by exactly three entrepreneurs and the first delivery in the chain transaction - from the first entrepreneur to the second entrepreneur - is carried out as the moving delivery and thus as the intra-community delivery.

For the medium-sized entrepreneur, this leads to an intra-Community acquisition in the destination country and a subsequent taxable domestic delivery. According to the normal principles of European VAT law, the medium-sized entrepreneur would have to submit VAT returns in the row in the country of acquisition, because in principle both the intra-Community acquisition carried out by him and the subsequent domestic delivery in the target country are required to submit tax returns in all relevant - i.e. up to to 28 - EU Member States, which can result in an almost prohibitive administrative burden.

The simplification consists in that, on the one hand, the intra-Community acquisition at the end of the movement of goods in the context of the first delivery is taxed in the other Member State, and on the other hand, the tax liability for the following domestic delivery is transferred to the buyer. In this way, the medium-sized entrepreneur avoids tax registration in the target country and is only exposed to reporting obligations in the country whose sales tax identification number he uses, where he is consequently already registered for tax purposes and has to submit sales tax declarations without this.

Requirements for a triangular transaction according to German legal understanding:

  • There are exactly 3 companies involved that conclude a delivery transaction for the same item.
  • The item is moved from one member state of the European Union to another member state of the European Union as part of the delivery by the first entrepreneur to the second entrepreneur ( Section 3 (6) sentence 5 UStG).
  • The 3 entrepreneurs use sales tax identification numbers issued by three different member states.
  • The first delivery is carried out as an intra-community delivery. The second delivery is a domestic delivery in the member state in which the transport ends ( Section 3 Paragraph 7 Clause 2 No. 2 UStG).

Example: Entrepreneur B orders a machine from Entrepreneur A with the order to deliver it directly to his customer C. The middle entrepreneur therefore carries out an order without ever having had the machine. It is also possible that B picks up the goods from A and delivers them to C. Under no circumstances may C be the last entrepreneur to collect the goods in his own name. Then there is no intra-Community supply between the first and the second entrepreneur. Rather, the movement of goods is to be assigned to the second delivery, so that the intra-Community delivery is present between the second and third entrepreneur. Then the second entrepreneur would have to register in the state in which the delivery began.

Invoicing, verification and reporting

The middle party has to prepare an invoice in which he has to point out the existence of an intra-community triangular transaction (§ 14a (7) UStG).

The following evidence must be kept and reports submitted (Section 25b UStG):

  • The first entrepreneur has to provide evidence for the intra-Community delivery to the second entrepreneur.
  • The second entrepreneur has to check the entrepreneurial status of the last customer with the help of the sales tax identification number.
  • The second entrepreneur has to send an invoice to the last customer with the reference to an intra-Community triangular transaction and the transfer of tax liability to the last entrepreneur.
  • The second entrepreneur has to indicate the delivery to the last customer in his summary report and to designate this as an intra-Community triangular transaction.

In the case of transactions with more than three entrepreneurs, the provisions on the intra-Community triangular transaction are only applicable in the relationship between three successive entrepreneurs. The other entrepreneurs carry out a taxable domestic delivery either at the beginning or at the end of the movement of goods.

Implementation in individual countries and their specifics

General

Some EU countries restrict the application of the regulation by meeting the requirement of Art. 141 lit. a) Interpret the VAT Directive particularly strictly. The wording of the provision states that an intra-Community triangular transaction exists only if the acquisition of goods in the Member State of receipt of goods is effected by a taxpayer (the middle party) who is not established there. Under settled (in the English version: established , in the French version: etabli ), those Member States already understood as the mere issuance of a VAT identification number by the tax authorities of that State. Since the regulation of the intra-Community triangular transaction serves to simplify, these states see no reason to apply it to entrepreneurs who are registered in the country of destination. This is because they can fulfill their administrative duties without the additional effort that the simplification should avoid. The group of Member States taking this strict view include Bulgaria , Denmark , Estonia , Luxembourg , Malta , Austria , Portugal , Slovakia , Spain , the Czech Republic , Cyprus and the United Kingdom . If the movement of goods ends in one of these countries, the simplification cannot be used by the medium-sized entrepreneur if he has his own VAT identification number from this member state.

Austria

  • The medium-sized entrepreneur may not have a residence or registered office in the country of destination ( Art. 25 Para. 3 lit. a) UStG ).
  • According to the Austrian Federal Ministry of Finance, the purchaser may not even have a registration (VAT number) in the country of destination (RZ 4294 UStR).
  • However, a sales tax registration of the medium-sized entrepreneur in the country of origin is not detrimental to the applicability of the triangular transaction regulation (maintenance decree of November 4, 2015, RZ 4294 UStR).
  • There is no triangular transaction if the medium-sized entrepreneur collects the delivery item himself or has it collected from the first entrepreneur, since in this case the acquisition (or the provision of power of disposal) does not take place in Germany but in the country of origin. ( Art. 25 para. 3 lit. b) UStG , RZ 4295 UStR).

Individual evidence

  1. ↑ See Recital 4 of Directive 77/388 / EEC of May 17, 1977 on the harmonization of the legal provisions of the Member States relating to sales taxes - Common VAT system: uniform taxable assessment base , accessed on June 10, 2017
  2. ↑ Directive 2006/112 / EC of November 28, 2006 on the common VAT system , accessed on June 10, 2017
  3. ↑ Gert Blühberger: The Triangle business from the German perspective , accessed on 13 June 2017th
  4. ↑ Fabiola Annacondia (Ed.): EU VAT Compass 2016/2017 . International Bureau of Fiscal Documentation (IBFD), 2016, ISBN 978-90-8722-376-2 , pp. 744 f .