Chain transaction
The chain transaction is a term of sales tax law and describes deliveries of an object in which at least three people conclude sales transactions for the same object. All deliveries are made in that the object of the deliveries is transported or dispatched directly from the first supplier to the last buyer. With a single movement of goods, several deliveries are carried out as part of a chain transaction, which must be checked separately with regard to place of delivery, time of delivery and qualification as stationary or moving delivery.
Historical development
The chain transaction was included as a legal definition in Section 3 (2) UStG (old version) until December 31, 1996 . According to this rule, the delivery to the last customer was considered at the same time as the delivery of each operator in the series. According to this regulation, all deliveries were made as moving deliveries at the same time and place.
With effect from January 1, 1997, the sales tax regulations for chain transactions were adapted to the regulations of the European Union. For this purpose, all regulations related to chain transactions have been repealed. Since then, the Value Added Tax Act no longer uses the term chain transaction. Section 3 (6) sentence 5 UStG contains the fact of a chain transaction without designating it as such.
Offense
A chain transaction exists when at least three people conclude at least two sales transactions for the same item and the item is passed directly from the first supplier to the last buyer . If one of these requirements is missing, it is not a VAT chain transaction and each delivery is to be assessed separately as an individual delivery of goods within the meaning of Section 3 (1) UStG. In particular, there is no chain transaction if the item is transported to the destination by several people involved (broken transport) and therefore there is no immediate arrival.
Example of a chain transaction:
Customer C orders a cupboard from dealer B, dealer B in turn orders the cupboard from wholesaler A and instructs them to transport the goods directly to customer C.
Solution:
The item of delivery goes directly from wholesaler A to customer C. It is therefore a chain transaction within the meaning of Section 3 (6) sentence 5 UStG, since at least three people have concluded sales transactions for the same item (the cabinet) and the cabinet directly from wholesaler to customer.
Problem
In the case of a chain transaction, there are correspondingly many deliveries like concluded sales transactions, but only one delivery is a moving delivery (dispatch or transport delivery). For the other deliveries, there are dormant deliveries. Due to the qualification as stationary or moving delivery, the place and time of performance of the individual deliveries must be determined. In addition, export deliveries according to § 6 UStG or intra-Community deliveries according to § 6a UStG require moving deliveries, so that only then the deliveries according to § 4 No. 1 UStG can be tax-free.
Which delivery is moving and which delivery is inactive depends primarily on who has power of disposal over the item at the time of the movement of goods.
- If the first entrepreneur in the row moves the goods, he usually regards the delivery as the moving one.
- If the last entrepreneur in the row moves the goods, the delivery to him is usually to be regarded as the moving one.
- If a medium-sized entrepreneur moves the goods in the row, it must be determined on the basis of the agreements of the persons involved whether he is moving the goods as a supplier or a buyer. According to Section 3 (6) sentence 6 UStG, it is assumed that the first delivery is the moving delivery, unless the medium-sized entrepreneur proves otherwise. It is questionable whether this legal provision is compatible with the VAT system directive .
Therefore, a distinction must be made to determine the place of delivery:
- The place of delivery of the moving delivery is where the movement of goods begins ( Section 3 (6) sentence 1 UStG).
- The place of delivery of the dormant delivery is there for the chain transaction,
- if the moving delivery precedes this, where the movement of goods ends (Section 3 Paragraph 7 Sentence 2 No. 2 UStG) or
- when the moving delivery follows where the movement of goods begins. (Section 3 Paragraph 7 Sentence 2 No. 1 UStG)
Example for the assignment of goods movements and their consequences:
Facts as above.
Solution :
Since A transports the cabinet to the customer and retains the power of disposal during the transport, the goods movement must be assigned to the first delivery. This means that the first delivery is executed as a moving delivery at the beginning of the goods movement and the second delivery as a dormant delivery at the end of the goods movement. If the movement of goods begins in one EU member state and ends in another EU member state, the factual requirements of a tax-free, intra-community delivery are met. Evidence of the prerequisites must be provided by means of documentary and book evidence.
Intra-community triangular business
The intra-community triangular transaction is a special case of chain transaction.
