VAT-related rulings on intra-Community acquisitions and triangular transaction simplification

December 19, 2025 EU VAT Update, VAT Triangulation

A recent VAT-related rulings was delivered by the Court of European Union on 3 December 2025.

This judgment clarifies that the VAT triangulation simplification is not strictly limited to a three-party supply chain as it can extend to more complex supply chains (“four -party chain”) where conditions are effectively met.

Standard VAT Triangulation scheme

The VAT triangular simplification is a regime normally conceived for three-party supply of intra Community transactions, involving one flow of goods: Party “A” selling to →Party ”B → with goods being delivered directly to → Party ”C, and two flows of invoices: one issued by Party “A” to →Party ”B  and the second issued by Party “B directly to → Party ”C.

To reduce the administrative and compliance burdens on traders and the tax authorities associated with such triangular transactions, there is a simplification measure by which the intermediary (Party B) can avoid a VAT registration in the country of its .

The case concerned a four parties supply chain where a Slovenian company bought products from a German supplier for the purpose of re selling same to three Danish VAT registered customers. Tax authorities denied the eligibility of the simplification measure claiming that the transaction involved four operators across three Member States and that the goods were not delivered to the intended third party, therefore the case was referred for preliminary ruling under EU law.

European Court key findings

  • The Court held that the VAT triangular simplification regime can also apply in complex chains involving four taxpayers, provided the statutory conditions are met (e.g., transport from Member State of dispatch to destination directly, correct use of VAT ).
  • The simplification does not require the immediate purchaser to physically take possession of goods; it suffices that the goods are delivered to the person for whom the subsequent supply is intended and same has legal ability to dispose of the goods. This is intended as even if the goods go to a subsequent buyer further down the chain (but who is VAT-registered in the relevant member state), that condition can still be satisfied;
  • The Court however crucially determined that, where a taxable person is aware or should have known they were participating in VAT fraud, they cannot rely on the simplification benefits of the VAT Directive.

Practical Implications for companies and strategic planning

This judgment is especially relevant to businesses engaged in cross-border supply chains within the EU  as it broadens the applicability of VAT triangulation simplification, effectively reducing administrative burden for companies with complex EU trading structures, as long as they meet the legal requirements, simultaneously also imposing high compliance discipline, especially in detecting and avoiding arrangements that could be seen as fraudulent.

Companies will be required to strictly :

  • Review transactional structures;
  • Monitor how goods are delivered and invoiced as documentation must support simplification applications;
  • Strengthen the safeguards against inadvertently participating in abusive schemes.

If your company is engaged in complex cross-border supplies and requires additional information, please do not hesitate to get in touch

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