Triangular transactions and conditions for the application of the simplification patterns

In a judgement dated July 26th, 2017, the CJEU stated that a supply of goods by a taxable person established in a first Member State is not exempt from value added tax where, prior to entering into that supply transaction, the person acquiring the goods, who is identified for value added tax purposes in a second Member State, informs the supplier that the goods will be resold immediately to a taxable person established in a third Member State, before he takes them out of the first Member State and transports them to that third taxable person, provided that that second supply has in fact been carried out and the goods have then been transported from the first Member State to the Member State of the third taxable person.

This unprecedent standpoint of the CJEU reduces, in theory, the scope of application of the simplification scheme applicable to triangular transactions. These transactions will then have to be subject to further analysis in view of this decision in order to secure the VAT regime.

Michel Guichard

Michel Guichard, Partner, leads the Indirect Tax activity. With more than 30 years’ experience in International and French Tax law, he advises his clients on indirect tax matters. Michel is […]