DEFINITION
A chain transaction is a series of sales of the same goods between several businesses, where the goods travel only once, directly from the first seller to the last buyer. Brokers and traders meet it all the time: you buy from a supplier in one country and resell to a customer in another, and the goods go straight from the supplier to the customer.
For VAT, only one sale in the chain can be the intra-community supply at 0%: the one the transport is attributed to, often called the moving supply. The others are domestic sales in the country where the goods leave or arrive. Since 2020, an EU-wide rule decides which sale it is when the intermediary arranges the transport, based on the VAT number it uses.
Getting this wrong means invoicing 0% on the wrong leg. Triangulation is a simplified case of a chain between three VAT-registered parties in three countries.
HOW KOLIBRA HELPS
Kolibra links the purchase and the sale of the same goods in one deal, records who arranges the transport through the Incoterm on each side, and checks the VAT numbers involved, so the facts that decide which leg is zero-rated are in one place.
The VAT numbers used along the chain decide where VAT is due; check them with the free EU VAT number check.