VAT triangulation

VAT triangulation is applicable when there are three companies involved in a single transaction, and they are in different EU countries. For example, a Spanish company with a Spanish VAT registration sells goods to a German customer, but the Spanish company first has to buy the goods from a French vendor prior to shipment directly to the German customer. Simplified triangulation permits the French vendor to issue a sales invoice to the Spanish company with its VAT number on it, but no VAT is charged as 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 (shifting the reporting requirement from the Spanish company); the Spanish company includes the acquisition and dispatch in its own VAT reporting.