It has become increasingly popular for businesses who trade cross-border, to make use of several different parties in the course of the supply chain. .
Supply chains can be complicated and there is a need to have multiple parties involved in one commercial transaction. More transactions means more supplies to consider from a VAT perspective.
These actions can lead to some significant compliance obligations from a VAT perspective. In circumstances where the triangulation simplification cannot be applied, the resultant supply is known as a chain transaction.
In a simple chain with only one intermediary, there will be a single transportation of goods between countries, but two supplies taking place. It is important to determine which supply involves the intra-community movement of goods and which is the domestic supply.
If you are planning on implementing a supply chain which involved two or more other parties, you must make sure the VAT treatment of each transaction is compliant with the EU law.