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TRIANGULATION

This guide provides a comprehensive overview of triangulation in the intra-community supply of goods, focusing on the VAT implications for transactions between three different Member States. It covers the definition of triangulation (A–B–C), the place of supply of goods in relation to transportation, and the conditions for VAT exemptions. Detailed information about invoicing, registration requirements, and reporting duties for taxable persons is included, ensuring clarity on compliance with VAT regulations across borders.

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TRIANGULATION

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  1. TRIANGULATION

  2. PLACE OF SUPPLY OF GOODS

  3. Reminder : place of supply of goods MS 1 MS 2 Invoice B A Invoice C TRANSPORT IN THE RELATION B - C Place of supply A – B and B – C in MS 1 A-B = No transport = where goods are put at the disposal of B B-C = Transport = where transport begins/Registration of B in MS 1

  4. Reminder : place of supply of goods MS 1 MS 2 Invoice B A Invoice C TRANSPORT IN THE RELATION A - B Place of supply A–B in MS 1 Place of supply B–C in MS 2 Transport Where transport begins No transport Where goods are placed at the disposal of C

  5. PLACE OF INTRA-COMMUNITY ACQUISITION

  6. Reminder : place of intra-Community acquisition of goods Place where transport ends

  7. Reminder: place of intra-Community acquisition of goods • Member State VAT Identification Number • Security net

  8. TRIANGULATION DEFINITION

  9. Triangulation (ABC) - Definition MS 2 B Sale 1 Sale 2 MS 1 A MS 3 C Transport 3 taxable persons (ABC) in three different Members States 2 sales : A – B and B – C 1 transport directly from A to C

  10. TRANSPORT BETWEEN B AND C

  11. Triangulation - Transport between B and C - No simplification possible MS 2 B Sale 1 Sale 2 MS 1 A MS 3 C Transport between B - C Supply A–B (no transport): place where goods are put at disposal of B (MS 1): local supply + VAT Supply B–C (transport): place where transport begins (MS 1) = IC supply exempt from VAT by B in MS 1 (B must register for VAT in MS 1) C is doing an intra-Community acquisition in MS 3

  12. TRANSPORT BETWEEN A AND B NO SIMPLIFICATION

  13. Triangulation - Transport between A and B MS 2 B Sale 1 Sale 2 MS 1 A MS 3 C Transport between A - B Supply A–B (transport): place where transport begins (MS 1) = IC supply exempt from VAT by A in MS 1 Supply B–C (no transport): place where goods are put at disposal of C (MS 3) B is doing an intra-Community acquisition in MS 3 followed by a local supply to C in MS 3 (VAT registration of B in MS 3)

  14. TRANSPORT BETWEEN A AND B SIMPLIFICATION MALTA IS MS 1

  15. Triangulation - Transport between A and B - Simplification MS 2 B Sale 1 Sale 2 MALTA A MS 3 C Transport between A - B Intra-Community supply made by A in Malta is exempt from VAT if conditions are fulfilled B is communicating a valid VAT number of another Member State (MS 2) to A B is reported as the purchaser of the goods in the recapitulative statement of A, under the VAT number of B in MS 2

  16. TRANSPORT BETWEEN A AND B SIMPLIFICATION MALTA IS MS 2

  17. Triangulation - Transport between A and B - Simplification MALTA B Sale 1 Sale 2 MS 1 A MS 3 C Transport between A - B Item 14(1) Third Schedule B communicates to A his Maltese VAT number : application of the security net Normally intra-Community acquisition by B in Malta but…

  18. Triangulation - Transport between A and B - Simplification MALTA B Sale 1 Sale 2 MS 1 A MS 3 C Transport between A - B Item 14(2) Third Schedule • ICA made by B in Malta is deemed to have been subject to VAT in MS 3 if B proves it is made for the purpose of a subsequent supply in MS 3 + 2 conditions: • C is reported as the person liable to pay VAT on the local supply to C in MS 3 • Code “T” must be reported in the recapitulative statement for the supply made to C • B reports this sale to C in the box “IC supply exempt” in his VAT return

  19. TRANSPORT BETWEEN A AND B SIMPLIFICATION MALTA IS MS 3

  20. Triangulation - Transport between A and B - Simplification MS 2 B Sale 1 Sale 2 MS 1 A MALTA C Transport between A - B Art.20(2)(a) VAT Act Item 1 Fifth Schedule Part Three ICA made by B in Malta is exempt from VAT if conditions are fulfilled C is registered under articles 10 or 12 and is reported as liable to pay VAT on the subsequent local supply made by B in Malta C must report this purchase in the box “ICA” of his VAT return

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