We help our clients with complicated supply chains make the most of VAT triangulation rules, and to avoid registering in multiple countries

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Supply chains allow streamlined production and distribution of goods and services. However, they create convoluted procedures from a VAT point of view. Find out how we help our clients with complicated supply chains make the most of VAT triangulation rules, and to avoid registering in multiple countries at significant cost.

In order to compete successfully, it’s necessary to consider how quickly a good can be delivered; whether the price is competitive; and if costs were minimal. To stay ahead of the competition, new supply chains are rapidly imagined and implemented. This leads though to the challenge of keeping on top of the VAT obligations that they create.

VAT Issues from Sales Growth

A client needed assistance understanding the VAT implications of a new supply chain. This involved triangulation rules. Quite often, as in this case, salespeople are driving new commercial arrangements, but with (understandably) little awareness of potential VAT consequences.

On a call with our VAT experts, we grasped in detail the supply chain. We provided the client with an option that greatly reduced its expected compliance obligations.

Complexity equals Risk

The client, established in Spain, and just concluded a contract to supply goods to a customer established in Germany. However, the customer specified that it wanted the goods delivered to one of its warehouses in the UK. To also complicate matters, our client was going to source and deliver the goods from a location in Italy. Consequently, the client worried that it needed an Italian and German VAT number. It also had concerns about the associated costs of this.

Having discussed the issue in detail with the client and understood the status of all the parties involved, we could conclude that the “Triangulation” rules could apply. These rules are in effect a simplification for businesses, allowing them to avoid the need to register for VAT in certain instances by shifting compliance obligations onto other parties in the supply chain.


Following our advice, the client was able to avoid the need to obtain any additional VAT registrations, as the obligations these would be used to meet were met by the other parties. We also assisted the client to explain the situation to its customer and supplier. Upon realising that there was minimal extra work for them involved, they adopted the Triangulation rules. This was a positive result for our client. It proved the benefit of discussing the VAT implications of new supplies up front, as the advice led to them enjoying significant savings going forward.

Need more information on triangulation? Contact our VAT experts.