Triangulation contracts

Definition of Triangulation contracts

• These are transactions which involve three VAT registered companies in 2 or 3 different Member states.
 

Tax treatment for Triangulation contracts

The transaction is exempt of VAT on the following condition :

• It requires 3 VAT registered companies in 3 different Member states : these are known as simplified "Triangulation" contracts.

If this condition is not fulfilled, the transaction becomes taxable at a certain level with the obligation to register one of the companies in one of the countries.

As an example : 3 VAT registered companies in 2 member states or 2 VAT registered companies and 1 non VAT registered company outside of the EU.

Beware of the trap :
If there is no "evidence of removal" of the goods out of the country by an international transportation documentation or by a customs form in the name of the exporter, the supplier could become liable for the VAT.
 

For all additional information about the triangulation contracts, please feel free to contact the ASD Group.