VAT and EU triangular transactions

Goods sold by a supplier at one end of Europe, invoiced to a Swiss customer and shipped directly to a recipient in a third country: this is the classic triangular transaction. It looks like a simple round of invoices, but from a VAT standpoint it is treacherous ground, especially for a Swiss operator moving between the EU regime and the Swiss one, two systems that do not speak the same language. Understanding where the tax “moves” is the difference between a clean operation and an assessment.

What a triangular transaction is

A triangulation occurs when three parties are involved in a chain of supplies relating to the same goods, which are however transported only once, usually directly from the first supplier to the last purchaser. There are therefore two (or more) invoices but a single physical movement of the goods.

The critical point is to identify which supply in the chain the transport “attaches” to: it is that supply that determines where the transaction is taxable and who must account for the tax. The other supplies in the chain are treated as “stationary” transactions, that is, located where the goods are before or after the transport.

The EU regime and the three-party simplification

Within the European Union there is a simplification for triangular transactions between three parties identified for VAT purposes in three different Member States. In short, the intermediary operator avoids having to register in the State of destination: the tax is accounted for by the final purchaser through reverse charge, provided the invoice carries the required indications and the transaction is correctly reported in the recapitulative statements.

Be careful, though: this simplification is designed for EU parties. A Swiss operator inserting itself as an intermediary in a European chain cannot always benefit from it and risks, in certain cases, having to open a VAT position in a Member State. This must be checked case by case, because a qualification error generates non-deductible tax and penalties.

When Switzerland comes into play

If the goods enter or leave Swiss territory, you are no longer in a purely intra-EU setting: a customs border is crossed. Here two distinct taxes matter:

import VAT (MWST), collected by the Federal Office for Customs when the goods are brought into Switzerland;
domestic Swiss VAT, at the standard rate of 8.1% since 2024, on supplies located in Switzerland.

For exports from Switzerland abroad, the supply is normally exempt with the right to deduction, but only if you hold the customs proof of export. Without documentation, the exemption falls away and the tax remains borne by the operator.

The crux of the proof

In triangulations the most delicate part is not theoretical but documentary. You must be able to demonstrate:

the actual physical route of the goods (where they leave from, where they arrive);
who organises the transport and to which supply in the chain it is attributable;
the customs proofs in case of import/export from Switzerland;
the consistency between invoices, contracts and transport documents.

An inconsistent documentary chain is the first element a tax authority challenges, because it suggests a location different from the one declared.

Recurring mistakes

Assuming the EU simplification always applies, even when one of the actors is non-EU, such as a Swiss operator.
Confusing the flow of invoices with the flow of goods: it is the transport that determines the location, not the sequence of documents.
Overlooking liability: whoever makes taxable supplies in Switzerland must check the threshold of CHF 100,000 of turnover and any obligation to register for MWST.
Not keeping the customs proofs, losing the right to the export exemption.

How to set up the operation

The correct approach is to reconstruct the operation before carrying it out: define who transports, identify the “moving” supply, establish where the tax arises in each country and understand whether VAT registration is needed abroad or in Switzerland. Contracts and invoicing are prepared on this basis, not the other way round.

How we work at SIH ONE

We analyse the supply chains of operators active between Switzerland and the European Union, qualify each transaction for VAT/MWST purposes, verify registration obligations and customs proofs and set up invoicing and documentation consistently with the real flows.

Do you handle chain sales between Switzerland and the EU and want to avoid double taxation or non-deductible tax? Discover our tax advisory services and structure your triangular transactions on solid foundations.