GlossaryEN1 min readUpdated: Jun 26, 2026
VAT triangular transaction
Unlike a general VAT chain transaction, the VAT triangular transaction applies only when exactly three VAT-registered businesses in three different EU Member States are involved: the first supplier ships goods directly to the final customer, while the intermediary arranges the deal on paper only, never taking physical possession.
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Source: https://ec.europa.eu/taxation_customs/business/vat/eu-vat-rules-topic/triangular-transactions_en
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Definition & Explanation
Unlike a general VAT chain transaction, the VAT triangular transaction applies only when exactly three VAT-registered businesses in three different EU Member States are involved: the first supplier ships goods directly to the final customer, while the intermediary arranges the deal on paper only, never taking physical possession. The EU triangulation simplification means the intermediary need not VAT-register in the destination country; the tax liability is instead reverse-charged to the final customer, who accounts for it as an intra-Community acquisition. The arrangement is common among EU wholesalers, brokers, and non-stocking distributors. One strict requirement: the intermediary's invoice must explicitly reference the triangular transaction—without that notation, the simplification does not apply and a registration obligation in the destination country may arise.
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