Comments on ECJ case T-646/24: VAT Triangular Transaction Simplification Applies to Four-Party Supply Chains

• The ECJ ruled that VAT simplification measures for triangular transactions can apply to supply chains with four parties, not just three, if the VAT Directive’s conditions are met.
• The judgment recognizes the economic reality that supply chains often involve more than three operators.
• The court clarified that simplification measures are denied not only in cases of fraud but also if the taxpayer knew or should have known about VAT abuse.
• The ruling aligns with established case law prioritizing the fight against tax evasion, avoidance, and abuse.
• The decision contradicts the German tax authorities’ view, allowing triangular transaction simplification in longer chains only if the three directly supplying entrepreneurs are at the end of the chain.

Source: kpmg.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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