Denmark: VAT Treatment of Triangular Transaction Revised

2 May 2019

A triangular transaction involves two supplies of goods between VAT-registered taxpayers in three EU member states, i.e. a business established in EU member state “A” supplies goods to a customer in EU member state “B,” but the goods are shipped directly to a customer in a third EU member state, “C.”

On the 11th of March 2019, the Danish authorities passed a change to the Danish VAT law governing the treatment of Triangular transaction. The changes are aimed at bringing the Danish rules in line with the EU VAT rules.

Under the EU Simplification of VAT rules, the intermediate taxpayer in the supply chain does not have to account for intra-community acquisition of goods in the member state of the recipient.

The changes in the Danish rules hold that in order to apply the simplification, the intermediary must not be established for VAT purposes in the country of the recipient. The word “established” replaced the registered. This means that in order for the simplification rule of triangular transaction to apply in Denmark, the intermediary supplier must not have a fixed establishment in the country of the recipient.

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