Stress in connection with Triangular Transactions

Help with the Chain Transaction Calculator Germany

  • Table of Contents:
  • 1) General Information on the Chain Transaction Calculator
    2) Selection Screen
    3) Chain Transaction Sketch
    4) Brief Description
    5) Detailed Description
    6) Print Version
    7) Editable Word Document
    8) Terms of Use
    9) Disclaimer of Liability

  • 1) General information on the Chain Transaction Calculator
    • Definition of a Chain Transaction:
      Sales transactions that are carried out by several entrepreneurs on the same item and in the course of which the goods pass directly from the first entrepreneur to the last purchaser during the transport or dispatch are called chain transactions. Chain transactions are thus characterized by the fact that there is only one single physical movement of goods for several sales transactions.

    • Legal Assessment:
      The assessment of the chain transactions illustrated herein was made from the perspective of the German legal provisions or from the point of view of the German tax authorities (Value Added Tax Application Decree / UStAE). I.e. the hypothetical case was assumed that the German law would apply in all Member States. Since all Member States implement the Directive on the VAT system of the EU with their national value added tax laws, the value added tax laws are actually almost the same. There are, however, slight differences which will be not described in detail here. Attention is, however, drawn to some of these differences in the notes (at the end of the detailed descriptions).

      It is to be noted that the administrative conception of the tax office, after which the here presented chain transactions were judged, is partly in contradiction to the most recent Federal Fiscal Court (BFH) decisions. As soon as these Federal Fiscal Court decisions are taken into account in administrative conception and the Value Added Tax Application Decree (UStAE) is amended correspondingly, it is expected that the assignment decision for the "moved supply" (this is the supply which may be tax exempt) will no longer focus upon who arranges the transport, but upon which entrepreneur has the right to dispose the goods as owner when crossing the border. In many cases, this will be the entrepreneur who arranges the transport anyway and the mentioned verdicts passed by the Federal Fiscal Court will not, in these cases, lead to any changed judgement. Still, it is already now recommended that, in cases in which the transport is arranged by the 1st purchaser, the first supplier should obtain a confirmation from his customer to the effect that the customer does not transfer the right of disposition of the delivery items to a third party before the goods have left national territory. Furthermore, it is recommended that all contracts should contain clear regulations regarding the point in time of the transfer of the right to dispose the goods as owner.

    • Standard Conditions:
      The evaluation of the chain transaction examples are each based on the following listed standard conditions:

      • The supplies constitute supplies of goods (and not services) to entrepreneurs.

      • The delivered goods are subject to the standard tax rate (no books, food, etc.) and are not subject to any special provisions (no motor vehicles, etc.).

      • The respective entrepreneurs of the Member States act with the VAT identification number of their own country (unless something to the contrary is noted in the examples).

      • The entrepreneurs do not have a VAT identification number from another country participating in the chain transaction (unless something to the contrary is noted in the examples).

      • The companies have no subsidiary and no residence or registered office in one of the other countries involved.

      • The entrepreneur who arranges the transport has the right to dispose the goods as owner at the time of the border crossing.

      • In cases of third country reference, the declaration for free circulation is made by the entrepreneur who arranges the transport (in special cases, the legal consequences are indicated in the notes at the end of the detailed description, if the declaration for free circulation is made for another entrepreneur).

      • No split transport takes place (a split transport obtains when two or more entrepreneurs divide up the transport route between each other).

      • There are no transactions on a commission basis.

      • There is no delivery to a consignment warehouse or a customs-free zone.

      • Entrepreneurs who arrange for the transport make no use of their allocation option pursuant to § 3 para. 6 sentence 6 dUStG (German Value Added Tax Act) (unless something to the contrary is noted in the examples).

      • The entrepreneurs are neither exempt from VAT nor subject to a flat rate.

      • When claiming tax exemption, the entrepreneurs are in possession of the required proofs, for instance export certificates, entry certificates, etc. (see also Value Added Tax Implementing Regulation (UstDV)).

    You can see from these listed conditions that the evaluations of the chain transaction calculator cannot replace a tax advice since only standard situations were evaluated. Even just a slight deviation from the standard situation can lead to a completely different tax assessment. Likewise, the consultation on how to simplify the tax consequences of a chain transaction can only be performed by a tax consultant who is informed of all the details in the course of the consultation. Please note the Terms of Use and the Disclaimer of Liability of this website.

  • 2) Selection Screen
    • Selection "Country of the 1st entrepreneur (E1)":
      The entrepreneur E1 represents the entrepreneur who has the right to dispose of the goods at the beginning of the chain transaction – thus in general, the manufacturer or wholesaler (= first supplier). By clicking on the corresponding button, select the country in which the goods (and therefore entrepreneur E1) are located at the beginning of the chain transaction. If the desired country is not available for selection, you will find more information via the "other countries" button. Should the goods not be located in the country in which entrepreneur E1 has their headquarters (i.e. in a foreign warehouse of the entrepreneur) at the beginning of the chain transaction, the country of the warehouse is to be selected. The entrepreneur E1 must be registered for value added tax purposes in the country of the foreign warehouse and the corresponding declarations (VAT returns, recapitulative statements, intrastat supplementary declarations) must be made in this country. It must, however, be verified that all the standard conditions of the chain transaction calculator are met in this case (especially in the case of triangular transactions).

    • Selection "Country of the 2nd entrepreneur (E2)":
      The entrepreneur E2 (=1st purchaser) represents the entrepreneur who has ordered the goods from entrepreneur E1 and resells them to entrepreneur E3. He thus receives an incoming invoice from entrepreneur E1 and provides an outgoing invoice to entrepreneur E3. By clicking on the corresponding button, select the country in which entrepreneur E2 has their headquarters. If the desired country is not available for selection, you will find more information via the "other countries" button.

    • Selection "Country of the 3rd entrepreneur (E3)":
      The entrepreneur E3 (=2nd purchaser) represents the entrepreneur who has ordered the goods from entrepreneur E2 and (if it is a four-tiered chain transaction) resells them to entrepreneur E4. However, if it is a 3-tiered chain transaction, then entrepreneur E3 is the last in the series and also the recipient (= last purchaser) of the goods. By clicking on the corresponding button, select the country in which entrepreneur E3 has their headquarters. If the desired country is not available for selection, you will find more information via the „other countries" button.

    • Selection „Country of the 4th entrepreneur (E4)":In case of a 3-tiered chain transaction, click on the button "no 4th Country". In a 4-tiered chain transaction, entrepreneur E4 (= last purchaser) represents the entrepreneur who has ordered the goods from entrepreneur E3. Entrepreneur E4 is the last in the series and also the recipient of the goods. ("last in the series" refers to the invoicing sequence. If one were to look at the ordering sequence, he would be the "first in the series"). By clicking on the corresponding button, select the country in which entrepreneur E4 has their headquarters. If the desired country is not available for selection, you will find more information via the "other countries" button.

    • Selection "Initiator of transport or dispatch":
      For the evaluation of a chain transaction, it is necessary to know which one of the entrepreneurs arranges the transport (i.e. which one of the entrepreneurs transports the goods by private truck or commissiones a trucking company with the dispatch). Where a dispatch is concerned, it is certainly significant to know which entrepreneur commissioned the freight forwarder as opposed to which entrepreneur bears the cost of the freight forwarding, since this allows one to derive which entrepreneur has the right to dispose of the goods at what point. Consequently the transition of the right of disposal forms the basis on which supplies could enjoy tax exemption (if all requirements are met), the evaluation of the chain transaction may be significantly changed by selecting another "initiator of transport or dispatch". By clicking on the appropriate button, select the entrepreneur (E1, E2, E3 or E4) who arranges the transport (as purchaser). In the event that the entrepreneurs E2 or E3 act as suppliers, select the button that corresponds thereto. Under www.chain-transaction.de you will find the explanation concerning an entrepreneur acting as purchaser or supplier.
      After a little practice you will be able to glean from the chain transaction sketch whether the selected chain transaction entails registration obligations (see description of the sketch). And this is exactly where you will appreciate the chain transaction calculator, because through just a few clicks (click on different transport initiators) you can see at a glance which entrepreneur must arrange the transport so that no or as few as possible registration obligations arise. The prerequisite is of course that you assess the chain transaction before you carry it out in practice, or sign the relevant purchase contracts!

    • Button "New Selection":
      Using this button, you get "To the Beginning". Just like at the beginning, the country of entrepreneur E1 is to be selected. Alternatively to this button, you can also change the countries of the individual entrepreneurs or select another initiator of the transport, even if an already completed chain transaction has been selected. In order to switch from a 4-tiered chain transaction to a 3-tiered one, simply click on the button "no 4th Country". In order to switch to a 4-tiered chain transaction, simply select a 4th country.

  • 3) Chain transaction sketch
  • Perhaps the most most useful tool of this chain transaction calculator is the chain transaction sketch. With a little practice, you can read off almost all the essential information from the sketch. I.e. you recognize at a glance

      • which supply is possibly tax-exempt (IC-supply or export-supply)
      • which supplies are subject to the value added tax of which country
      • registration obligations of the individual entrepreneurs
      • which entrepreneur must operate with which VAT identification number
        (In the chain transaction sketches "VAT identification number" is abbreviated to "VAT No.").

    • Entrepreneur Square:
      There is a square framed in black for each entrepreneur, with the exception that the square of the entrepreneur who arranges the transport is framed in red or green. By default, it is framed in red, except if an entrepreneur acts in their capacity as a supplier pursuant to § 3 para. 6 sentence 6 dUStG, in which case the square is framed in green.

      The squares contain an inscription of up to 3 lines:

      • 1st line:
        Here you find the definition (E1 to E4) of the respective entrepreneur.

      • 2nd line:
        Here is the country of the respective entrepreneur, regardless of the country in which the supply is taxable. For the first and last entrepreneur of the series, this country constitutes both the beginning and end of the movement of goods. From the countries of the entrepreneurs in the middle (1st and 2nd purchaser or recipient) one recognizes the invoicing path or sequence. The countries of these purchasers are not connected to the physical movement of goods.

      • 3rd line:
        In those cases where an entrepreneur must operate with a foreign VAT identification number, this shows which VAT identification number they must operate with (e.g. Austrian VAT identification number). This is equivalent to a value added tax registration obligation in that country (e.g. Austria).

    • Arrows:
      The short arrows represent the invoicing sequence, wherein the possibly tax-exempt supply (IC-supply or export-supply) can be recognized through a bold arrow (the determination of whether a supply could be tax-exempt or not is described under www.chain-transaction.de).
      The long arrow represents the physical movement of goods.

    • Arrow Texts:
      Each of the short arrows corresponds to an invoice. The texts above these arrows show which VAT (of which country) must be indicated in the respective invoices or whether the invoice is tax-exempt (IC-supply or export-supply). In those cases where the supply is subject to VAT in the third country (and not tax-exempt), the aforementioned text is missing.
      The long arrow indicates the physical movement of goods. Above the arrow one can see which entrepreneur arranges the transport and below the arrow one can see (if applicable) which entrepreneur makes the declaration for free circulation of the goods.

  • 4) Brief description:
  • The brief description first lists all registration obligations. Subsequently each "supply" (= invoice) is described including references to the relevant paragraphs as follows:

    • Specification of whether it is a possibly tax-exempt supply (IC-supply or export-supply)
    • Data on which country this supply is subject to tax in
    • In the case of a tax-exempt supply, the reason for its exemption is given

  • 5) Detailed description from the perspective of individual entrepreneurs:
  • Except for some sample pages, these detailed descriptions are only available in the paid access area. Here you will find a separate description for each of the entrepreneurs participating in the chain transaction with the following contents:

    • Registration obligations including information about which VAT identification number must be used towards the respective supplier and customer.

    • Incoming Invoice:

      • Import value added tax:
        Notes on input VAT deduction entitlement in connection with the import value added tax

      • Value added tax return:
        Information about which country (or in exceptional cases, which countries) the VAT return has to be filed in and which registrations must be done. In those cases where the VAT return is to be filed with the German tax office, the respective identification numbers of the VAT return are stated as well.

      • Intrastat supplementary declaration:
        Information on the country in which the Intrastat reporting is to be done and which country is to be indicated as country of dispatch (In each case it is assumed that the entrepreneur is required to report due to their turnover figures, which are currently in Germany EUR 800,000.-).

    • Outgoing Invoice:

      • Invoicing:
        Exact description of whether and which VAT (of which country) must be indicated in the respective invoices or whether an invoice is tax-exempt (IC-supply or export-supply), including instructions on which features and details must appear on the invoice in connection with the tax exemption.

      • Value added tax return:
        Information about which country (or in exceptional cases, which countries) the VAT return has to be filed in and which registrations must be done. In those cases where the VAT return is to be filed with the German tax office, the respective identification numbers of the VAT return are stated as well.

      • EC sales list (Recapitulative statement):
        Information about which country the EC sales list has to be filed in and which declarations must be done.

      • Intrastat supplementary declaration:
        Information on the country in which the Intrastat reporting is to be done and which country is to be indicated as country of destinaton (In each case it is assumed that the entrepreneur is required to report due to their turnover figures, which are currently in Germany EUR 500,000.-).

    • Notes:

      The notes contain a lot of additional valuable information, such as

      • Different legal assessments of other Member States
      • Legal consequences of using a wrong VAT identification number (double purchase)
      • Notes in the event another entrepreneur owes the import VAT
      • Suggestions for obtaining a tax exemption
      • Note if the simplification rules of the triangular transaction are not applicable and suggestions for remedy.
      • Notes in connection with the legal situation frim 01.01.2020 an in those examples, where the initiator of the transport has the nationality of the country of departure (and thus has automatically a VAT identification number of the country of departure) a second chain transaction sketch under exercise of the option to choose acc. to Article 36a (2) of the VAT Directive 2006/112/EC.
      The notes can be found in each chain transaction typical for these but they do not purport to be exhaustive. No opposite conclusion should thus be drawn in the event of a "missing" note.

  • 6) Printable version (only available for registered users):
  • Clicking on the button "Printable version" opens up a new page without title picture, selection screen and hyperlinks in the Explorer, which is thus more suitable for printing.

  • 7) Editable Word document (only available for registered users):
  • The editable Word document is only available in the paid access area. It essentially corresponds to the print version according to the current legal situation (i.e. without comment on the legal situation 2020) and without © marking and is intended to facilitate the work of tax consultants by allowing them to use this file as a basis for their own chain transaction assessments. The proper display of the chain transaction-sketch contained in the Word file requires Microsoft Word 2010 or more recent (in older versions, the font of the sloping arrows may not be displayed correctly). It is necessary first to store the Word files locally in order to proccess them.

  • 8) Terms of Use (as of 29 April 2017):
    • These terms of use apply for the free access to the chain transaction calculator (www.chaintransaction-calculator.de) including supplementary sites (e.g. www.chain-transaction.de, triangular-transaction.de). However, in case of the (paid) full access, the usage contract is valid which has to be accepted in the course of the registration.
      By using the chain transaction calculator (in the free access area) you agree to these Terms of Use. Please read these carefully. The operator of this website may change or modify these Terms of Use at any time. You should thus review these Terms of Use regularly. If you do not agree to the amended terms, you must stop using the chain transaction calculator and you are not allowed to make any more queries.

    • Definition "chain transaction calculator": The chain transaction calculator is a web-based service tool on the website www.chaintransaction-calculator.de (as well as the linked info sites),that issues an assessment of the value added tax consequences from the perspective of the German legal norms or from the point of view of the German tax authorities (Value Added Tax Application Decree / UStAE) upon entering the countries involved in a three- or four-tiered chain transaction. This evaluation is thus based on the hypothetical case that the German laws apply in all countries involved. Please also note the standard conditions the chain transactions are based on. The standard conditions can be changed by the operator of the website at any time (e.g. to comply with changes in law).

    • Certified Public Accountants, tax consultants and members of other professions who are authorized to advise clients in connection with chain transactions, undertake to merely consult the evaluations of this chain transaction calculator as a support for their own evaluations and conduct the final verification for accuracy themselves. A passing on of the evaluations of the chain transaction calculator to clients is prohibited and constitutes especially a copyright infringement (A passing on is only allowed if a usage contract was concluded as part of the paid full access).

    • Users who are not covered by the professional groups mentioned in the previous point must have a tax consultant check the evaluations of this chain transaction calculator before they take any business decisions related thereto (Since several thousand examples were evaluated in the chain transaction calculator with IT support, it must be expected that an error may have crept in in some individual instances). A passing on of the evaluations of the chain transaction calculator to clients is prohibited and constitutes a copyright infringement (A passing on is only allowed if a usage contract was concluded as part of the paid full access).

    • All users of the chain transaction calculator accept the disclaimer of liability cited subsequent to the Terms of Use.

    • These terms of use shall be subject to Austrian law exclusively excluding the conflict rules and the UN Sales Convention.

    • All disputes arising from these Terms of Use as well as from the use of the website www.chaintransaction-calculator.de (as well as the linked info sites) are subject to the exclusive jurisdiction of the competent court for commercial matters in Vienna (Austria).

    • Severability Clause: Should one or several provisions of these Terms of Use turn out to be invalid in whole or in part, or if any loophole should exist, the validity of the remaining provisions of this contract shall not be affected. The contractual parties are obliged to replace the invalid provision or to fill the loophole with a valid provison that comes as close as possible to the intended content of this agreement

  • 9) Disclaimer of Liability:
    • The chain transaction calculator contains several thousand chain transaction examples that have been evaluated in an IT supported fashion. Due to the large number of examples, a final check of all examples by the operator of this website is impossible and both software technical errors and errors caused by differing legal opinion must therefore be taken into account.

    • The website is a translation of a German-language website. Hence the risk of translation errors must be taken into account.

    • Users who include contents and results of the website in written or oral appraisals for their clients undertake to check these contents and results for their accuracy beforehand and to correct them if necessary and therefore assume all liability towards these clients themselves and without recourse against the operator of this website. Users without an appropriate professional qualification who nevertheless provide expert opinions in connection with chain transactions for their clients, undertake to have the contents to be used by the chain transaction calculator and its results checked beforehand by a tax consultant with the required professional qualification.

    • Users who employ the website content for their own business, undertake to have this content checked for accuracy by a tax consultant before making business decisions based on these contents. Any possible liability claim can thus only be directed against the tax consultant who has done this verification for correctness.

    • It is hereby also expressly noted that the evaluations of the chain transaction calculator – even if these are flawless – cannot replace a tax consultancy as only standard situations were evaluated (without interruption of delivery, without commission business, without deviating declarant for free circulation, etc.). For a complete list of the standard conditions, please see point 1) on this side. Even just a slight deviation from the standard situation can lead to a completely different tax assessment. Likewise, the consultancy on how to simplify the tax consequences of a chain transaction may only be done by a tax consultant, who was given all the details in the course of the consultation.

    • The exclusion of liability as well as the listed obligations of users also apply to the excerpts from legal norms provided as part of this website, including supplements (e.g. sketches).

    • Due to the reasons listed above and the obligations of the users, no liability is accepted by the operator of the websites www.chaintransaction-calculator.de , www.chain-transaction.de and www.triangular-transaction.de (as well as other linked info sites). The user expressly waives any recourse to the operator of this website as part of a liability!

    • This website contains links to external sites. No liability is assumed for the content of these external websites.

 

 
  Management Accountant

Ing. Gert Bluehberger
Arbeiterstrandbadstrasse 21
1210 Vienna
Austria

Phone.:
Fax:
Email:
 

+43 660 / 666 00 26
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office 1 @ bilanzbuchhaltung-wien.at
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