Sportway inc. is a wholesaler

Chain transaction

If several entrepreneurs, at least two, conclude a sales transaction for the same delivery item, this is called a chain transaction.

This is what awaits you today:

Definition of chain transaction

The individual performance of the chain transaction takes place in that the delivery item is transported or sent directly from the first supplier to the last buyer.

This means that several deliveries are carried out with one movement of goods in a chain transaction. These deliveries must be checked for the place of delivery and the time of delivery.
If only one of these conditions is missing, it is not a VAT chain transaction. Normally it is then a moving delivery of goods, which you can find in § 3 Paragraph 1 UStG.

It is also not a chain transaction if the transport or dispatch of the delivery is carried out by more than one entrepreneur.

To make it a little clearer for you, here is a little one Example:

Max Steuer orders a group of tables from the furniture dealer Holz, the furniture dealer Holz orders the group of tables from the wholesaler Bein and gives him the order to deliver the table group directly to the customer Max Steuer.

Since the table group from the wholesaler Bein goes directly to the customer Max Steuer, it is a chain transaction within the meaning of Section 3 (6) sentence 5 UStG.
Several entrepreneurs are involved in this sales transaction and the table group goes directly from the wholesaler to the customer.

This happens quite often in practice and is therefore easy to understand. But it goes on.

In a chain transaction, there are just as many sales transactions as deliveries, but only one delivery is the moving delivery and thus the transport delivery. The remaining deliveries are called unmoved deliveries, which is very important for the VAT assessment.


Incorrect information in the sales tax return can quickly lead to a special sales tax check.

In the case of an export delivery as part of a chain transaction, for example, only the moved delivery can receive a tax exemption.

A distinction must be made between two deliveries:

For the transport or dispatch delivery, the place of delivery is where the movement of goods begins. (Section 3 (6) sentence 1 UStG)

For dormant deliveries, the place of delivery is where the transport or dispatch delivery ends (Section 3 (7) sentence 2 No. 2 UStG) and where the transport or dispatch delivery begins. (Section 3 Paragraph 7 Sentence 2 No. 1 UStG)

Which delivery is moving and which is stationary depends on which entrepreneur is moving the goods.

For our example this would mean:

The delivery follows the scheme: wholesaler Bein → furniture dealer wood → customer Max Steuer. Since furniture dealer wood is the first to move the goods, the delivery from wholesaler Bein to furniture dealer wood is the moving delivery. This is the place of delivery at wholesalers Bein.

The dormant delivery is from furniture dealer Holz to customer Max Steuer. This follows the 1st delivery and the place of delivery is where the delivery ends, for customer Max Steuer.

If the customer Max Steuer had picked up the table group from wholesaler Bein, the 1st delivery would be the stationary and the 2nd the moving one.

What is an intra-community triangular deal?

From the term it can easily be deduced that it is an intra-Community triangular transaction if three entrepreneurs, who are based in different EU countries, conclude a sales transaction for a delivery item.

You have to record these intra-community triangular transactions in the ZM (summary report).

The intra-community triangular transaction is a chain transaction, but is subject to a simplification rule with regard to sales tax.

The requirements according to § 25b UStG

The supplier, the first and the second buyer (three entrepreneurs) conclude a sales transaction, whereby the delivery item is delivered directly from the supplier to the second buyer.
All three entrepreneurs are based in different EU member states.

The delivery item arrives from one EU member state to another EU member state.
The delivery item is delivered either by the supplier or by the first purchaser.


The French wholesaler (first buyer) orders wooden tables from a Polish joinery (supplier) and has them delivered directly to his Spanish furniture store (second buyer).

It is an intra-Community triangular deal when the French wholesaler picks up the goods from the Polish carpenter himself and then delivers it himself to his Spanish furniture store.

The function of the intra-community triangular business

The simplification rule for the intra-Community triangular transaction with regard to sales tax is as follows.

For the first buyer (French wholesaler) of a chain transaction, the triangular transaction is an intra-Community acquisition in the destination country (Spain) and leads to a taxable domestic delivery.

It follows that the first buyer (French wholesaler) would have to submit a VAT return in another country (Spain).

Due to the simplification rule, the acquisition is considered to be taxed in the EU member state (Spain) and the tax liability is transferred to the second buyer (Spanish furniture store).

This saves the French wholesaler from having to register in the country of destination Spain.

The accounting

The supplier must note the following when submitting the invoice:

  1. There must be a reference to the tax exemption for the first customer on the invoice
  2. the reference to a triangular transaction must be noted
  3. the USt-IdNr (sales tax identification number) for the first and second customer must be given

It must be clearly recognizable that the sales tax liability is transferred to the second customer.

Movements of goods to a third country

According to Section 3.14, Paragraph 12 of the UStAE, an entrepreneur based in another EU member state or in a third country who is involved in a chain transaction must always register in Germany.

When the movement of goods begins domestically and ends in the third country

The tax exemption according to § 4 No. 1a in conjunction with § 6 UStG can only be used for the moving delivery.

An example:
A Mongolian entrepreneur M orders a printing press from the Chinese entrepreneur CH.

CH orders the printing machine from entrepreneur D in Aachen, who forwards the order to manufacturer E in Heidelberg. CH picks up the printing press in Heidelberg and transports it with its own truck directly to M.

The BFH (Federal Fiscal Court) says about this case study (XI R 30/13, BFH / NV 2015, 769, LEXinform 0934303):
If CH picks up the goods from E and can prove that he is acting as a buyer of D and not himself as a supplier and CH only receives ownership in China and he does not transfer ownership before the delivery item has left Germany, then the 1st delivery E to D is the transport delivery.

The place of delivery is Heidelberg, as this is where the delivery begins. This delivery is taxable and subject to tax. An export delivery within the meaning of Section 4 No. 1 Letter b in conjunction with Section 6 Paragraph 1 No. 2 UStG is not given, as customer D is not a foreign buyer within the meaning of Section 6 Paragraph 3 UStG.

When the movement of goods begins in the third country and ends domestically

In this case, a relocation of the place of delivery (Section 3 (8) UStG) for the transport or dispatch delivery may be considered.

This is the case if the entrepreneur whose delivery is to be assigned to the transport or dispatch in a chain transaction, is also debtor of the EUSt.

An example:
The German greengrocer from Munich orders avocados from the Spanish wholesaler Munos. He orders the avocados from the Limas farmer in Peru. Limas transports the avocados directly to Munich on behalf of the Spanish wholesaler.

The German greengrocer has the parts put into free circulation and pays the German EUSt (delivery condition "duty unpaid and untaxed").

Two deliveries are made in this chain transaction (Limas to Munos and Munos to the greengrocer).

The transport can be assigned to Lima's first delivery to Munos, as Limas, as the first entrepreneur in the series, transports the avocados itself. According to Section 3 (6) sentence 5 in conjunction with sentence 1 UStG, the place of delivery is Peru.

The delivery of Limas is subject to the German VAT on import into Germany. A relocation of the place of delivery in accordance with Section 3 (8) UStG is out of the question, as Limas, as the supplier of the transport delivery, is not also debtor of the EUStat.

The second delivery (Munos to the greengrocer) is the dormant delivery. According to § 3 Paragraph 7 Clause 2 No. 2 UStG, it is deemed to have been carried out in Germany, since it ends there and follows the transport.

Munos carries out a tax-free delivery according to § 4 No. 4b UStG, since its delivery in the supply chain precedes the import by the end customer.

An import for the company of the German greengrocer is given because he clears the imported item in Germany for free circulation under customs and tax law and then uses it to carry out sales.

The German greengrocer can deduct the VAT incurred as input tax in accordance with Section 15 (1) sentence 1 no ).

The broken carriage or shipment

In the case of a broken transport or dispatch, a characteristic for the chain transaction is missing.

The delivery item does not go directly from the first entrepreneur to the last buyer. As a result, this process has to be split up into several individual deliveries that are connected one behind the other and must be assessed separately.

An example:
Allgreeb from Turkmenistan orders a machine from Heimann in Austria, which Heimann in turn orders from Landauer in Austria. Heimann instructs Landauer to transport the machine directly to the Heimann warehouse in Rostock. Heimann sends the machine to Turkmenistan by ship.

It is not a chain transaction, but a broken transport and dispatch. Therefore, two individual deliveries are made.

The delivery from Landauer to Heimann is taxable in Austria and tax-free according to § 6a Abs. 1 Nr. 1 to 3 UStG, if Heimann vis-à-vis Landauer with his German USt-IdNr. occurs. Heimann makes a taxable, but tax-free intra-community acquisition in Germany according to § 4b No. 4 UStG.

If Heimann uses his Austrian VAT ID number towards Landauer, he indicates that he would like to make a taxable purchase. Landauer then makes a taxable and taxable delivery in Austria.

In both cases, Heimann makes a taxable (§ 3 Paragraph 6 UStG) but tax-free export delivery according to § 6 Paragraph 1 No. 1 UStG with the delivery to Allgreeb.

Danger: The BMF letter of December 7, 2015 (BStBl I 2015, 1014) contains a new simplification rule in Section 3.14, Paragraph 19, Clause 2 of the UStAE.

Participants in a chain transaction

As already said, a chain transaction must have at least three participants. Beyond the number three, the number of participants is not limited.

Private end customer as the last customer

It is also a chain transaction if private buyers, i.e. non-entrepreneurs, are the last buyers in the sales transaction. You must also apply all of the principles already mentioned in such a case. However, a private end user does not have a VAT ID number.

Therefore, the prerequisites for the taxation of an intra-community acquisition do not exist here if the goods get from one EU member state to another.