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HMRC internal manual

VAT Single Market

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HM Revenue & Customs
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Simplifications: triangulation: non-EC involvement

Goods exported outside the EC

In this example the goods are sent to a final customer located outside the EC.

Use this link to view Triangulation non-EC 1 diagram

The absence of an intra-EC 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 to 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 EC

Where goods are imported into the EC 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 EC and the goods are imported into the EC on arrival in France. But the intermediate supplier and the final customer are in different Member States.

Use this link to view Triangulation non-EC 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 EC 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 EC.

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 EC

In this example both the first supplier and the final customer are EC businesses but USA Co, as intermediate supplier, is located outside the EC.

Use this link to view Triangulation non-EC 3 diagram

If USA Co happens to be registered for VAT elsewhere in the EC, 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 Member State.

If the place of USA Co’s supply is the UK there will be

  • a domestic supply by UK Co to USA Co in UK, and
  • an intra-EC supply by USA Co to French Co (zero-rated in the UK) 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-EC supply by UK 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.