Triangular transaction: intermediary organizes transport

August 27, 2024

When an intermediary participates in the transaction, special rules apply for determining the movable delivery. An intermediary is an entity other than the first supplier of goods who independently or through a third party (acting on their behalf) dispatches or transports the goods.

Supply rules in the EU

For intra-community chain transactions involving an intermediary, the legislator has introduced a legal presumption: the dispatch or transport of goods is attributed to the delivery made to the intermediary. There is one exception to this rule: the dispatch or transport is attributed to the delivery made by the intermediary if the intermediary provides their supplier with a VAT-EU number issued by the country from which the goods are dispatched or transported. Therefore, if the intermediary provides their supplier with a VAT-EU number issued by the EU country from which the goods are dispatched or transported, the transport should be attributed to the delivery made by the intermediary (movable delivery).

Triangular transactions: examples

Variant I: intermediary provides supplier (Entity A) with a German VAT-EU Number

In this case, if the intermediary organizes the transport and does not provide the supplier with a VAT-EU number issued by the member state from which the goods are dispatched or transported (i.e., Polish), the movable delivery is the delivery made to the intermediary. Therefore, assuming that Polish entity A sells goods to German intermediary B, who provides A with its German VAT-EU number and then sells the goods to German entity C, A should recognize an intra-community supply (ICS) to B and apply the 0% VAT rate (if statutory conditions are met). The delivery between B and C will be a domestic delivery, taxed in Germany at the applicable rate.

Variant II: intermediary provides supplier (Entity A) with a Polish VAT-EU Number

If the intermediary provides the supplier (entity A) with the EU VAT number issued by Poland, i.e., the country from which the goods are shipped or transported, then the moving supply will be the supply made by the intermediary (between B and C). In such a situation, the supply between A and B will be a stationary supply subject to VAT in Poland at the appropriate rate, and entity B will recognize an intra-community supply to entity C, which, if the conditions of the law are met, will be taxed at a 0% rate.

Tags chain transactions, intra-community supply transaction, wewnątrzwspólnotowa dostawa towarów