Beyond Three Parties – Triangular Simplification in Quadrangular Transactions under Article 141 of the VAT Directive

Sammanfattning

This thesis examines the conditions under which the triangular simplification mechanism under Article 141 of the VAT Directive may apply to quadrangular chain transactions involving four taxable persons established or identified for VAT purposes across multiple Member States. The triangular simplification mechanism relieves the intermediary operator in a three-party chain transaction from registering for VAT in the Member State of destination by shifting the VAT liability to the final customer through the reverse charge mechanism. In December 2025, the General Court of the European Union confirmed in MS KLJUČAROVCI that this mechanism is not necessarily confined to three-party transactions, holding that the physical movement of goods is not decisive for the application of Article 141. However, that judgment concerned only one particular configuration, leaving open how Article 141 operates in other quadrangular structures. Employing a legal-dogmatic research method, this thesis extends the analysis to configurations not yet addressed in existing guidance and case law. The analysis demonstrates that the mechanism can in theory operate within quadrangular transactions, but that its practical scope is considerably more limited than existing guidance might suggest, as it operates exclusively within one triangular segment of the broader chain. The thesis further concludes that the current framework is not fully consistent with the principle of fiscal neutrality and that a dedicated legislative framework for multi-party chain transactions would better serve the objectives underlying Article 141.