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HMRC internal manual

VAT Single Market

Simplifications: triangulation: the supply chain

With triangulation it is important to establish the supply chain and confirm that each participant is acting in their own right. In other words where appropriate each party is buying in the goods and/or making an onward supply as the case may be.

Although there may be three parties involved with a transaction it is not necessarily always a chain supply. For example, one of the parties might simply be issuing the sales invoice on behalf of the supplier, just as a parent company might sometimes do for one of its subsidiaries. Other than that it is not involved in the actual supply of the goods and so the transaction will be subject to the normal VAT rules .

Alternatively the intermediary might act as an agent for the supplier. In this case the intermediary is providing a service to a principal. The supply of goods is still between the supplier and the final customer and again is subject to the normal rules.

For more information about triangulation and supply chains see the manual covering the place of supply of goods (VATPOSG).