Case
Your company (B) based in Germany purchases goods from a Czech supplier (A) and resells the goods to a French client (C). The goods are transported directly from the Czech Republic to France by the Czech supplier himself (no stop in Germany).
VAT registration in the country of arrival of the goods is normally required...
Your company (“B”), the middle man, is normally required to be VAT registered in France, where the transport of the goods ends. Domestic sales being subject to domestic reverse charge, no French VAT should be added on your final invoice (payment of VAT shifted to your client).
...Unless the triangulation simplification scheme is applicable
The EU Directive provides however for a Simplified Scheme avoiding to middle man (“B”) the obligation to register in the last Member State (C). The main issue that businesses face is that the Simplified Scheme is not interpreted consistently throughout EU by National Tax Authorities. French do not accept the use of the simplification measures where B is also VAT registered in Member State A or Member State C. As from 1/1/2020, new measures will be applicable (VAT Quick Fixes) harmonizing the rules.
Pay attention to
Companies involving in chain transactions must pay attention to the following key issues:
- Ascertain the physical flow of goods and the invoices in order to determine the correct VAT treatment of the chain transactions and possible VAT obligations of each supplier involved in the Member State where goods come from and/or which they are intended for;
- Check if the Simplified Scheme for triangulation transactions is applicable in France (country of arrival) of the goods and which conditions should be fulfilled in this respect;
- in case the triangulation Simplified Scheme is not applicable, proceed with the local VAT registration in France;