VAT triangulation simplification
For example, a Spanish company with a Spanish VAT registration sells some goods to a German customer, but the Spanish company must first purchase the goods from a French vendor, prior to shipment directly to the German customer. Ordinarily, this would require the Spanish company to register for French VAT in France, in order to record the purchase and sale to the German customer. The Spanish company would also need to register for German VAT.
To avoid companies to register for VAT in multiple countries, the triangulation simplification exemption was created within EU VAT law, and is implemented across all member states.
Triangulation simplification is supported in SyteLine through core features such as Reverse Charge VAT, EU Sales List and Intrastat (EU SSD) reporting.
Rules for triangulation simplification
To avoid non-resident EU VAT registration for the Spanish seller in the scenario above, these conditions must apply:
- The three parties must be resident in three separate EU member states.
- The French vendor issues a sales invoice to the Spanish company with its VAT number on it. No VAT is charged, because this is a regular intra-community dispatch of goods.
- The German customer becomes responsible for recording the arrival of goods into Germany as an intra-community supply. This shifts the reporting requirement from the Spanish company.
- The Spanish company includes the acquisition and dispatch in its VAT reporting
How triangulation affects Intrastat and EC Sales Lists
In the example above, the Spanish company must report the sale to the German customer in its Spanish EC Sales List. For Intrastat, the French vendor shows the dispatch, and the German customer shows the arrival of the goods. There is no need for the Spanish company to declare any movement of goods as they did not pass through Spain.