VATNIEU5245 - Triangulation: non-EU involvement
Goods exported outside the single market
In this example the goods are sent to a final customer located outside the single market.
Use this link to view Triangulation non-single market 1 diagram
The absence of an intra-single market movement of the goods will result in either
- a supply in the UK by UK Co to French Co and a zero-rated export by French Co from UK; or
- a zero-rated export by UK Co and received by the French Co in USA.
The triangulation simplification arrangements do not apply. So, in applying the first treatment, French Co will possibly be required to register for VAT in the UK. However, treating the goods as exported by UK Co will remove any liability on the part of the French Co to register in the UK.
Goods imported from outside the single market
Where goods are imported into the single market the VAT treatment will often depend on the contractual arrangements between the parties, particularly who is responsible for importing the goods.
In the example below the first supplier (by USA Co) is outside the single market and the goods are imported into it on arrival in France. But the intermediate supplier and the final customer are in different member states.
Use this link to view Triangulation non-single market 2 diagram
There are a number of possible outcomes which rely on the place of supply rules for imported goods. (For more information about this see the manual covering the place of supply of goods (VATPOSG).
Where
- USA Co imports the goods into France, there will be a supply by USA Co to UK Co in France, followed by a supply by UK Co to French Co also in France, but
- if UK Co imports the goods into France, the supply by USA Co to UK Co will be outside the scope of EU VAT, and only the supply by UK Co to French Co will take place in France, but
- if French Co imports goods into France, the supply by USA Co to UK Co and by UK Co to French Co will both take place outside the EU and the UK.
With the triangulation simplification arrangements being unavailable both UK Co and USA Co may be required to register for VAT in France depending on who imports the goods.
Intermediate supplier located outside the single market
In this example both the first supplier and the final customer are UK(XI) and EU businesses respectively but USA Co, as intermediate supplier, is located outside the single market.
The goods move from Northern Ireland to France
Use this link to view Triangulation non-single market 3 diagram
If USA Co happens to be registered for VAT elsewhere in the EU the simplified procedure can be used to avoid the need for it to register in either France or the UK. Otherwise USA Co will be making its supply of goods to French Co either in the UK or in France. This will result in it being liable to register for VAT in either the UK + Northern Ireland indicator or France.
If the place of USA Co’s supply is the UK (Northern Ireland) there will be
- a domestic supply by UK(XI) Co to USA(XI) Co in UK, and
- an intra single market supply by USA(XI) Co to French Co (zero-rated in the UK as a dispatch from Northern Ireland) and
- an acquisition by French Co in France.
If the place of USA Co’s supply is France there will be
- a (zero-rated) intra single market supply by UK(XI) Co to USA Co in France
- an acquisition by USA Co in France, and
- a domestic supply by USA Co to French Co in France.