Stress with Chain Transactions

Chain Transaction Calculator Germany 2020:

Select the countries participating in the chain transaction in the sequence of the invoicing path:

Country of the 1st entrepreneur: GermanyAustriaFrancePolandSwitzerland
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Country of the 2nd entrepreneur:GermanyAustriaFrancePolandSwitzerland
Country of the 3rd entrepreneur:GermanyAustriaFrancePolandSwitzerland
Country of the 4th entrepreneur:GermanyAustriaFrancePolandSwitzerland
Initiator of the transport:2nd entrepreneur3rd entrepreneur
             
 
Sample page of the Chain Transaction Calculator: The following chain transaction evaluations corresponds to the information contained in the full version. With your registration in the Chain Transaction Calculator you get access to evaluations in this form for all 5000 examples of the Chain Transaction Calculator.
 
Chain Transaction Calculator Germany / Dispatch by E1 (FR-DE-PL)
 

Facts:

A Polish entrepreneur E3 (= last purchaser) orders a machine from his German supplier E2 (=1st purchaser). Since the supplier E2 does not have the machine in stock, he orders it from the French wholesaler E1 (=first supplier) and instructs him to dispatch the machine directly to the Polish entrepreneur E3.

Brief description of the triangular transaction:

  • Registration obligations:
    • Due to the simplification rule for triangular transactions (§ 25b UStG), no registration is required for the first purchaser E2 in the country of arrival.

  • "Supply 1" from E1 (France) to E2 (Germany)
    • Assignment of transport or dispatch according to § 3 (6) UStG in conjunction with § 3 (6a) sentence 2 UStG
    • Zero-rated VAT supply in France (E1)
    • Tax exemption pursuant to § 4 (1)(b) UStG in conjunction with § 6a UStG (intra-Community supply)

  • "Supply 2" from E2 (Germany) to E3 (Poland)
    • Transaction without transport/dispatch assignment (§ 3 (7) UStG)
    • Taxable supply in Poland (E3)
    • Triangular transaction according to § 25b UStG

  • Special feature of this triangular transaction
    • Due to the application of the simplification rule for triangular transactions (§ 25b UStG), the tax liability of the German entrepreneur E2 is transferred to the Polish entrepreneur E3 (reverse charge procedure).

Detailed description from the perspective of the individual entrepreneurs:

From the perspective of the 1st supplier E1 (from France):

  • Outgoing Invoice:

    • Invoicing:
      Invoice without VAT with reference to the tax exemption (intra-Community supply) pursuant to § 4 (1)(b) UStG in conjunction with § 6a UStG (or alternatively with reference to Article 138 of the Directive 2006/112/EC) and specification of the own (French) VAT identification number as well as the (German) VAT identification number of the German entrepreneur E2.
      No indication to the triangular transaction is made on this invoice!

    • VAT Return:
      Declaration of the sales transaction as an intra-Community supply.

    • EC Sales List (ESL / Recapitulative statement):
      Declaration as (intra-Community) supply to the (German) VAT identification number of the German entrepreneur E2.
      No labeling as a triangular transaction!

    • Intrastat Supplementary Declaration (Intrastat SD):
      Declaration as dispatch to Poland.

From the perspective of the 1st purchaser E2 (from Germany):

  • Incoming Invoice:

    • VAT return:
      The incoming invoice does not include VAT. The intra-Community acquisition of the first purchaser as part of a triangular transaction is deemed to be taxed and therefore not to be included in the German VAT return (from a German perspective). It is a prerequisite that the entrepreneur E2 proves that such a triangular transaction exists and that he has met his obligation to report (by inclusion of the outgoing invoice to E3 in the ESL) .
      I.e. even though the entrepreneur E1 reports an intra-Community supply, the entrepreneur E2 does not have to report an intra-Community acquisition.

    • Intrastat Supplementary Declaration (Intrastat SD):
      The first purchaser E2 has no reporting obligation in triangular transactions.

  • Outgoing Invoice:

    • Invoicing:
      The invoice must be issued without VAT and contain the following information: "Triangular transaction according to § 25b UStG" (or alternatively with reference to Article 141 of the Directive 2006/112/EC) und "Transfer of the tax liability pursuant to § 25b (2) UStG" (or alternatively with reference to Article 197 of the Directive 2006/112/EC) (see also § 25b.1. (6) UStAE). In addition to the own (German) VAT identification number, the invoice must contain the VAT identification number of the Polish entrepreneur E3.

    • VAT Return:
      Due to the simplification rule of the triangular transaction, the tax liability from this supply transfers to the Polish entrepreneur E3. The value of the outgoing invoice must nevertheless be recorded in row 38/code 42 (from a German perspective).

    • EC Sales List (ESL / Recapitulative statement):
      Declaration of the sales transaction to the (Polish) VAT identification number of the Polish entrepreneur E3 and labeling as a triangular transaction.

From the perspective of the last purchaser E3 (from Poland):

  • Incoming Invoice:

    • VAT return:
      The incoming invoice contains no VAT, but the reference to the existence of a triangular transaction and the transfer of tax liability. The Polish entrepreneur E3 thus has to calculate the tax himself based on the Polish tax rates and include it in the VAT return on the one hand as VAT according to § 25b (2) UStG and on the other hand as input VAT from intra-Community triangular transactions according to § 25b (5) UStG. This is a zero-sum game, and does not result in any payment burden.

    • Intrastat Supplementary Declaration (Intrastat SD):
      Declaration as arrival from France.

Notes to the triangular transaction:

  • The above detailed descriptions from the perspective of the respective entrepreneurs represent only an indication of how the tax assessment would be if the German laws were to apply in all involved countries. National deviations from the German legislation were also not taken into account in the chain transaction sketch and the brief description!

  • You find the exact requirements for the applicability of the simplification rules for triangular transactions at www.triangular-transaction.de.

  • You can find the German version in the reihengeschaeftrechner.de.

  • Alternative A: If the simplification rule for triangular transactions should not or may not be applied (e.g. if the German entrepreneur E2 is domiciled in Poland), then the supply from E2 to E3 is taxable in Poland (23% Polish VAT) and the German entrepreneur E2 must register in Poland if he is not already registered.

 
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