EU chain transaction
February 3, 2011 | 100,00 EUR | answered by Oliver Burchardt
A German entrepreneur orders goods from a Swiss entrepreneur. The Swiss entrepreneur delivers the goods to an Italian entrepreneur.
The Swiss entrepreneur invoices the German entrepreneur. The German entrepreneur invoices the Italian entrepreneur.
Questions:
1) Does VAT need to be charged in Germany or Switzerland?
2) Do Intrastat or Summary Declarations need to be submitted in Germany or Switzerland?
Greetings.
Dear inquirer,
Thank you for your inquiry, which I am happy to answer as part of an initial consultation.
Please note that the tax assessment is based on the information provided. Changing, adding, or omitting information may affect the tax assessment.
In the scenario you described, it is partly important who is the debtor of the import VAT according to the agreed delivery terms. This determines the place of supply and therefore also where the taxation is to take place.
As the movement of goods is carried out by the Swiss entrepreneur, the place of delivery is initially in Switzerland. This delivery is tax exempt in Switzerland as an export delivery. Since Switzerland is not a member of the EU, the regulations regarding Intrastat declarations do not apply. However, Switzerland has regulations regarding trade statistics that are comparable to Intrastat. Reporting obligations are triggered here.
The second delivery, triggered by you to the Italian company as a dormant delivery, takes place in Italy and is taxable there. However, this does not answer the question of whether the delivery is also subject to tax there.
Tax liability in Italy arises when you owe the import VAT. In this case, you must import the goods into Italy, register with an Italian tax office, and declare the import VAT. You can claim input tax deduction from the import VAT paid. At the same time, you must issue an invoice to your customer with separately stated Italian VAT. You must remit the VAT to the Italian tax authorities, while your customer can deduct the input tax.
If your customer owes the import VAT, the delivery in Italy is tax-exempt. In this case, you must not issue an invoice with a separate VAT statement. Otherwise, you would owe Italian VAT, while your customer cannot claim input tax deduction.
Since no taxable supplies are made in Germany in both scenarios, reporting obligations do not apply. However, corresponding statements must be submitted in Italy.
I hope my explanations have been helpful to you.
Kind regards,
Oliver Burchardt
Tax Advisor
