E-Commerce, VAT | 14. February 2022

Triangular operations or chain transactions: What is meant by this?

Chain transactions and intra-community triangular operations are particularly relevant terms for turnover tax law. We explain the different regulations with examples. by

shutterstock 718106503
shutterstock 718106503

The name components “chain“ and “triangular“ suggest it: In both cases, more than two companies participate in a chain of orders and deliveries.

Chain transaction: moving and dormant shipment

What is a chain transaction? A chain transaction occurs when several but at least three business operators conclude supply transactions for the same goods, and the goods are physically transported directly from the first supplier to the last buyer/end customer by one of the business operators involved in the chain transaction.


The customer Franz Schauer GmbH from Essen ordered a flat-screen TV from the merchant Elektrofritz from Bochum. The merchant Elektrofritz does not have the TV in stock and orders it from the wholesaler Maxi-TV in Frankfurt. Maxi-TV transports the TV directly to the final buyer, Franz Schauer.

Here a so-called moving and a dormant shipment takes place. The moving shipment is from the wholesaler Maxi-TV to the merchant Elektrofritz GmbH, as the movement of goods is assigned to this shipment due to the transport carried out. The turnover transaction between the merchant Elektrofritz and its customer Franz Schauer is referred to as a dormant shipment. Both are liable for VAT, as the place of supply is in Germany.

Intra-Community triangular operations and chain transactions

What happens if the chain transaction is a cross-border transaction within the EU? The facts of the chain transaction still apply, but with one significant difference. A tax exemption can be considered for the moving shipment – and as a rule only for this.

A special case of the intra-Community chain transaction is the intra-Community triangular operation, for which a simplification applies. By transferring the tax liability to the last business in the chain, the middle business is relieved of the registration and reporting obligations in the country where the movement of goods ends.


Let’s look at the design agency De Smedt from Amsterdam that orders PC screens from Elektrofritz in Germany. For its part, Elektrofritz orders them from the Czech manufacturer Supratronics and has them delivered directly to Amsterdam by Supratronics.

Without the simplification of the intra-Community chain transaction, the first customer, Elektrofritz, would have to register for VAT in the destination country, the Netherlands, and declare an intra-Community acquisition and a local delivery in the Netherlands. With the simplification, the declaration of the intra-Community purchase is no longer necessary, and Elektrofritz can issue a net invoice without VAT to the De Smedt agency. The invoice must contain the following information:

● Triangular operation

● Indication that the tax liability is transferred to the final purchaser

● His VAT identification number and the one from the last purchaser

Intra-Community triangular operations must also be declared in the recapitulative statement.

Movement of goods to a third country (non-EU)

If the movement of goods starts in the home country and ends in a third country, the moving shipment can be VAT-exempt.


The Russian entrepreneur Voronin orders screens from Elektrofritz in Bochum, Germany. Elektrofritz orders the screens from the wholesaler Maxi-TV in Frankfurt. Voronin collects them there personally by vehicle and transports them to Russia. According to § 3 para. 6a sentence 3 UStG, Elektrofritz’s delivery to Voronin is considered a moving shipment. Tax exemption as an export delivery can be considered.

Movement of goods starts in the third country and ends in the domestic country


Elektrofritz orders screens from the wholesaler VisiCo in Spain. VisiCo orders the screens from the manufacturer Hungchong in China. Hungchong delivers them directly to Elektrofritz. According to § 3 para. 6 sentence 1 in conjunction with § 3 para. 6a sentence 2, the place of the moving shipment is the place where the goods are delivered. § 3 para. 6a sentence 2 UStG is China. Elektrofritz has the items cleared for free trade under customs and tax law after VisiCo has handed over the computer parts and pays the import VAT. In general, he can claim this as input tax. The delivery from VisiCo / Spain to Elektrofritz / Germany is a dormant delivery. It can remain tax-free because it precedes the import by Elektrofritz. Here, too, the invoice must refer to the tax exemption.

Chain transactions with private end-users


The Dutch private customer Henk van Daalen orders a TV set from Elektrofritz. Elektrofritz orders it from the Czech manufacturer Supratronics. Supratronics sends it directly to van Daalen in the Netherlands. The first transaction results in an intra-Community acquisition in the Netherlands for tax purposes. Elektrofritz has to register for tax in the Netherlands.

Conclusion: The regulations remain confusing

Although the legislator has standardised the tax treatment of chain transactions with the so-called quick fixes, which came into force on 1 January 2020, hardly any merchant, such as a small or medium-sized online shop, can see through all the regulations when it comes to the cross-border movement of goods. The eClear solution ClearVAT, which enables online merchants to make VAT-free deliveries for cross-border B2C goods sales in all EU countries, offers relief. Find out more here.

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