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HMRC internal manual

VAT Place of Supply (Goods)

HM Revenue & Customs
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Main rules: intra-EC movements of goods: triangulation

What is triangulation?


Triangulation is an extension of the difficulties associated with chain supplies (see VATPOSG3820). In a classic case of triangulation A supplies B, who in turn supplies C, but the goods move directly from A to C.

This can be demonstrated diagrammatically as follows:

Use this link to view triangulation diagram

The place of supply permutations

The supply from A to B will always be in the Member State from which the goods are dispatched. The supply from B to C will depend on which supply generated the removal of the goods from A to C.

If it were the A to B supply, this means that the goods were delivered to B in the Member State in which C is located. This makes B’s supply to C a domestic supply in that Member State.

Alternatively, if it were the B to C supply this means that B received the goods from A in the Member State in which A is located. This makes A’s supply to B a domestic supply in A’s Member State and B’s supply to C will take place in the same Member State.

As a result of this B may be required to register in either A or C’s Member State, particularly if C is located in neither Member State. Alternatively if C is registered for VAT elsewhere within the EC they are likely to be eligible to adopt a simplified procedure which avoids the need for additional VATregistrations. You can find details about this in the manual covering the Single Market.

More complicated scenarios

The position becomes more complicated as the number of supplies increases. For example the position could look like this:

Use this link to view complicated scenarios diagram

Here the goods move from France to the UK. Assuming A and B are French companies with C and D being UK companies, it is necessary to establish which of the supplies involves the intra-Community movement of the goods.

If it is the A to B supply, then A’s supply takes place in France and each of the subsequent supplies take place in the UK. However, if it were the C to D supply, this would mean that A, B and C’s supplies all took place in France. The likelihood in these circumstances is that A and B will be registered for VAT in France and C and D registered for VAT in the UK. In that case the pragmatic approach adopted by most Member States in these circumstances, is to accept the B to C supply as the intra-EC supply and, as a result, avoid the need for either B to have to register for VAT in the UK or C having to register for VAT in France.