Facts:
A Swiss entrepreneur E4 (= last purchaser) orders a machine from his Austrian supplier E3 (=2nd purchaser). The latter in turn orders the machine from the French wholesaler E2 (=1st purchaser). Since the wholesaler E2 does not have the machine in stock, he orders it from the German manufacturer E1 (= first supplier).
The Austrian entrepreneur E3 instructs his forwarder with the pickup of the machine from the German manufacturer E1 and subsequent delivery to the Swiss entrepreneur E4. Brief description of the chain transaction:
- Registration obligations:
- The French entrepreneur E2 has to obtain a VAT registration in the country of departure (Germany).
- From a German perspective the Austrian entrepreneur E3 has to obtain a VAT registration in the destination country Switzerland.
- "Supply 1" from E1 (Germany) to E2 (France)
- Transaction without transport/dispatch assignment (§ 3 (7) UStG)
- Taxable supply in Germany (E1)
- "Supply 2" from E2 (France) to E3 (Austria)
- "Supply 3" from E3 (Austria) to E4 (Switzerland)
- Transaction without transport/dispatch assignment (§ 3 (7) UStG)
- From a German perspective this is a taxable supply in Switzerland (E4).
Detailed description from the perspective of the individual entrepreneurs: From the perspective of the 1st supplier E1 (from Germany):
Outgoing Invoice:
- Invoicing:
This supply is taxable in Germany (E1). The invoice must therefore be issued with 19 % German VAT, stating the own (German) VAT identification number.
- VAT Return:
Declaration of the sales transaction in line 13/code 81 as taxable (domestic) supply.
 From the perspective of the 1st purchaser E2 (from France):
Registration obligations:- The French entrepreneur E2 has to obtain a VAT registration in the country of departure (Germany) and act with his German VAT identification number towards E1. The entries listed below are consequently to be included in the German VAT return.
Incoming Invoice:
- VAT return (at the German Tax Office):
The German VAT contained in the incoming invoice can be deducted as input tax and must be included in the VAT return in line 38/code 66.
Outgoing Invoice:
- Invoicing:
Invoice without VAT with reference to the tax exemption (tax-exempt export supply) pursuant to § 4 (1)(a) UStG in conjunction with § 6 UStG (or alternatively with reference to Article 146 of the Directive 2006/112/EC).
- VAT Return (at the German Tax Office):
Declaration of the sales transaction in line 22/code 43 as a tax-exempt export supply.
 From the perspective of the 2nd purchaser E3 (from Austria):
Registration obligations:- From a German perspective the Austrian entrepreneur E3 has to obtain a VAT registration in the destination country Switzerland. The entries listed below must therefore be included in the Swiss VAT return.
Incoming Invoice:
- VAT return (at the Swiss Tax Office):
Whether the import VAT is to be included in the VAT return and if an entitlement to deduct VAT obtains is governed by the legal provisions of the third country and is not analyzed in more detail here, since Switzerland is only an example of many possible third countries.
Outgoing Invoice:
- Invoicing:
From a German perspective this supply is taxable in Switzerland (E4). The invoice must probably be issued with Swiss VAT. Whether or not this sales transaction is subject to VAT is governed by the legal provisions of the third country and is not analyzed in more detail here, since Switzerland is only an example of many possible third countries.
- VAT Return (at the Swiss Tax Office):
A declaration in the VAT return is governed by the legal provisions of the third country.
 From the perspective of the last purchaser E4 (from Switzerland):
Incoming Invoice:
- VAT return:
A declaration in the VAT return is governed by the legal provisions of the third country.
Notes to the chain transaction:
- You can find the German version in the reihengeschaeftrechner.de.
- The assessment of this chain transaction from the Austrian perspective you can find in the reihengeschaeftrechner.at.
- Alternative A: If the Austrian entrepreneur E3 acts with a German VAT identification number towards the French entrepreneur E2, the tax exempt supply shifts to the supply between E3 and E4. However, the supply from E2 to E3 is then taxable in Germany (19% German VAT). The supply from E1 to E2 remains unchanged taxable in Germany. The detailed description of this variant can be found by clicking on the "E3 as supplier"-button in the selection screen.
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