In the previous article, we looked in detail at what happens with VAT when a Czech company sells goods to final consumers who are not VAT payers in the EU (the B2C segment, distance sales, the OSS scheme, and so on).
Now we move on to the other half of the picture, B2B sales, meaning supplies between taxable persons or entities identified for VAT purposes.
Key questions we will cover
- Which transactions can be exempt from Czech VAT and under what conditions
- How to reliably prove that the goods were actually transported
- How to determine the “place of supply” in single-step and multi-step transactions
- Why the simplified triangulation scheme matters and when it helps you avoid mandatory VAT registration in another EU country
This article is based on the explicit provisions of Act No. 235/2004 Coll. on VAT (DPH) and Directive 2006/112/EC. Formal quotations are kept without free interpretation, and between them you will find brief explanations and practical examples.
1. Basic definitions where the analysis starts
Supply of goods to another EU Member State
Section 13 (§ 13)
- A supply of goods means transferring the right to dispose of the goods as an owner.
- A supply to another EU Member State is only such a supply where the goods are actually dispatched or transported to a different EU Member State.
These two points may seem self-evident, but they determine whether we can apply a VAT exemption and what evidence we will need to collect. Under Czech VAT, only a supply that meets the definition of a supply of goods to another EU Member State can be exempt.
2. When a B2B sale is exempt from Czech VAT
Exemption conditions Section 64 (§ 64)
The exemption applies only if all of the following conditions are met at the same time
| Condition | What to pay attention to |
|---|---|
| 1. The customer has a valid VAT ID in another EU country | Check it in VIES and keep a screenshot as evidence |
| 2. The supply is reported in the Recapitulative Statement Souhrnné hlášení | A wrong figure can lead to VAT being reassessed |
| 3. The goods are actually dispatched from the Czech Republic | You will need the documents listed in section 3 |
| 4. Transport is arranged by the seller, the buyer, or an authorised carrier | A courier or freight forwarder counts as a third party carrier |
3. Proving the movement of goods
3.1 If transport is arranged by the seller
You need two independent pieces of evidence.
Option A
two documents from the first group, for example a CMR consignment note, bill of lading, invoice from the transport company, and similar documents.
Option B
one document from the first group plus one document from the second group, for example an insurance policy, a bank statement confirming payment of freight, or a warehouse receipt confirming delivery.
3.2 If transport is arranged by the buyer
You need the same two pieces of evidence as above, and in addition a written confirmation from the buyer (statement of receipt) issued no later than the 10th day of the following month.
Extra supporting proof such as photos, GPS tracking data, or warehouse delivery notes can be useful in non-standard logistics setups.
4. Determining the place of supply for VAT purposes
Place of supply for VAT Section 7 (§ 7)
If goods are supplied without dispatch or transport, the place of supply is the country where the goods are located at the moment the right of ownership is transferred. For example a sale in a shop.
If goods are supplied with transport, the place of supply is the country where the transport begins, provided that the transport is arranged by the seller or the buyer. For example a Czech VAT payer sells goods to a German buyer and either organises delivery themselves, or the German buyer sends their own carrier to collect the goods.
In a B2B sale between two parties established in different EU countries, the transaction will be either subject to Czech VAT or exempt under Section 64 of the Czech VAT Act.
Example a Czech VAT payer sells goods to a German buyer
- Without transport the goods do not leave the Czech Republic. The place of supply is in the Czech Republic where ownership is transferred, so Czech VAT applies.
- With transport the VAT point remains in the Czech Republic because the transport starts there. The sale is either subject to Czech VAT if the buyer is not VAT registered or the exemption conditions are not met, or it is exempt from Czech VAT if all exemption conditions are fulfilled.
5. Chain transactions where the transport sits
With three or more parties involved, the key task is to link the single transport movement to one specific supply in the chain.
Why this matters
Only the supply to which the transport is attributed can qualify as an intra-EU supply. And only that “transported” supply can be exempt from Czech VAT under Section 64 of the VAT Act.
When the same goods are sold through a chain of consecutive supplies and are dispatched or transported from the first supplier’s country directly to the last customer in the chain, the transport may be attributed either to
(a) the intermediary, meaning to the first supply, or
(b) by the intermediary, meaning to the second supply, provided that the intermediary has communicated to its supplier a VAT ID issued by the Member State of dispatch. In other words, the intermediary is VAT-registered in the country where transport starts and uses that local VAT ID in the transaction.
An intermediary is a supplier in a chain transaction who
(a) is not the first supplier, and
(b) dispatches or transports the goods itself or through a third party acting on its behalf.
5.1 Practical examples of chain supplies within the EU
Below are examples where transport is arranged by the seller or by the intermediary.
Scenario
A Czech VAT payer sells goods to a German VAT payer, who then sells the same goods to a Polish VAT payer. The goods are shipped from the Czech Republic directly to Poland.
Under the basic rule, the transport is attributed to the first supply, between the Czech supplier and the German intermediary. That means the Czech supplier may apply the exemption under Section 64.
However, if the intermediary (the German company) is VAT-registered in the Czech Republic and provides its Czech VAT ID to the Czech supplier, the transport is attributed to the second supply, between the German intermediary and the Polish buyer. In that case, the Czech supplier cannot use the Section 64 exemption.
Example 1
A Czech company acting as an intermediary buys goods from a Czech manufacturer and resells them to a German buyer.
A) The Czech manufacturer delivers the goods to the Czech intermediary’s warehouse, and the Czech intermediary then ships the goods to Germany.
Here we have two separate transport movements
- Czech manufacturer → Czech intermediary with transport
Czech VAT applies because the place of supply is where transport begins, and the supply is not exempt. - Czech intermediary → German buyer with transport
This supply may be exempt as an intra-EU supply if all conditions are met.
B) The Czech manufacturer ships the goods directly to the German buyer. If the intermediary provides its Czech VAT ID to the Czech manufacturer, the transport is attributed to the second supply
- Czech manufacturer → Czech intermediary without transport
Czech VAT applies. - Czech intermediary → German buyer with transport
Exempt as an intra-EU supply if conditions are met.
Example 2
A Czech intermediary buys goods from a Polish seller and resells them to a German buyer. The Polish seller ships the goods directly to Germany.
There is one transport movement
- Polish seller → Czech intermediary with transport
Exempt as an intra-EU supply. - Czech intermediary → German buyer without transport
German VAT applies. The Czech intermediary must register for VAT in Germany and account for VAT there.
In this situation, the simplified triangulation scheme can be used if transport is arranged by the intermediary or by the first seller.
Example 3
A Czech intermediary buys goods from a Slovak VAT payer and resells them to another Slovak company. Since the goods move only within Slovakia, the transaction is governed by Slovak VAT law and Czech VAT does not apply.
- Slovak seller → Czech intermediary
Invoice with Slovak VAT. The Czech company cannot reclaim this VAT from the Czech tax office. A refund from another EU country is possible once a year via a special form. - Czech intermediary → Slovak buyer
Invoice without VAT, provided the Czech company has not exceeded the threshold for VAT registration in Slovakia.
Transport attribution depending on who organises delivery
- the first supplier arranges transport, transport is attributed to the first supply
- the intermediary arranges transport and does not have or does not provide a Czech VAT ID, transport is attributed to the first supply
- the intermediary arranges transport and provides a Czech VAT ID, transport is attributed to the second supply
- the final buyer arranges transport, transport is attributed to the second supply
The triangulation scheme as a solution for chain supplies within the EU
In chain transactions involving three companies from different EU Member States, one common problem is determining which specific supply should be VAT-exempt. This often leads to confusion, multiple VAT registrations, and significant administrative burden.
EU VAT legislation, however, provides a simplified triangulation scheme. If the parties meet the required conditions, it allows them to streamline the VAT treatment and avoid unnecessary registrations. That is why triangulation is considered one of the key tools for optimising chain trade.
Exemption conditions all five must be met
- The intermediary is VAT-registered in a Member State other than the buyer’s country and acquires the goods for onward supply.
- The goods are transported directly from the first supplier to the final buyer.
- The intermediary provides its foreign VAT ID to the first supplier.
- The invoice issued to the buyer includes a note that the sale is carried out under the triangulation scheme.
- The buyer is a VAT payer or a VAT-identified person and accounts for local VAT as an intra-EU acquisition.
To qualify as a triangulation transaction, transport must be arranged by the first supplier, the intermediary, or an independent third party authorised by one of them. If the final buyer transports the goods on its own, the simplified triangulation scheme cannot be applied.
The main benefit of triangulation is that the intermediary does not need to register for VAT in the buyer’s country, even though the goods physically arrive there. This is especially important for Czech companies actively trading with Germany, Austria, Poland, and other EU countries.
If the intermediary cannot apply triangulation, it must
- register for VAT in the buyer’s country
- charge local VAT
- file VAT returns there
- bear additional administrative costs
Correctly structuring a triangulation transaction therefore reduces tax and compliance risks and makes cross-border trade more efficient.
Summary VAT checklist for a B2B seller
- Verify the buyer’s VAT ID in VIES.
- Decide in advance who will arrange transport and which documents you will obtain.
- Report the transaction in the Recapitulative Statement (Souhrnné hlášení) and in your Czech VAT records.
- If there are more than two parties, determine which supply the transport is linked to.
- Where possible, use the triangulation scheme to avoid extra VAT registrations.
Following these steps minimises the risk of additional VAT assessments and disputes with tax authorities, both in the Czech Republic and in your customer’s country.
Still have questions?
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