The most popular trading scenario involving companies registered in the EU is the VAT triangulation scheme. Triangulation rules were specially devised in order to simplify cross-border trading, so that EU companies wouldn’t have to register for a VAT number in each EU member state to which they deliver goods. Although triangulation is easy to understand, it seems that for many business owners this trading model is a significant source of misunderstanding.

The first rule to remember is that the model must involve three companies, registered in three different EU member states, each with its own VAT number. One company sells goods to another company, which then sells the same goods on to the third company. However, the goods are transported directly from the first company to the final (third) company.