According to section 3.14 UStAE there is a chain transaction if sales transactions within the meaning of Section 3 (6) sentence 5 UStG are concluded by several companies on the same item and where this item is transported or dispatched directly from the first entrepreneur to the last buyer. (A special case of the chain transaction is the intra-Community triangular transaction within the meaning of Section 25b (1) UStG.)


Example of a chain transaction:

The entrepreneur D1 in Cologne orders a machine that is not in stock from the wholesaler D2 in Hamburg. D2 forwards the order to the manufacturer in DK (Denmark). DK transports the machine directly to Cologne in its own truck and hands it over to D1. There is a chain transaction, since several entrepreneurs conclude sales transactions with the same machine and the machine is transported directly from the first entrepreneur (DK) to the last buyer (D1).

Often times, especially in the classifieds section of the newspaper or in automobile portals on the Internet, the note VAT can be stated can be found on a used car. Many people do not know what to do with this term, as they are used to being given final prices in retail and advertising.

What is the meaning of VAT reportable

Ultimately, this is a distinguishing feature between commercial and private advertisements. When a used car dealer uses the term VAT deductible, he is pointing out two things at the same time:

First, his company has a certain size because it pays VAT. Essentially, it should be said that there is also an administrative simplification for small businesses with annual sales of up to around 50,000 euros. They then neither pay VAT nor can they have the VAT paid back. Using the sales tax calculator  is important there.

For normal private customers, however, this makes no difference, because a used car of 11,900 euros always costs this final amount. Second, VAT is also a clear indication that it is a commercial offer. This means that the customer or car buyer can also exercise all warranty rights and guarantees that a commercial company offers. Value added tax not deductible means that no input tax can be drawn when buying a car.

Are there any other financial consequences?

For every private customer: No. For a corporate customer who pays VAT himself, however, there is a difference in terms of costs and input tax deduction. If he buys a car for the company and pays 11,900 euros, he can deduct 1,900 euros VAT as input tax deduction on his next VAT return. If he pays 11,900 euros for an offer that does not include VAT, he cannot deduct the input tax. In return, the full amount goes into the cost side of the balance sheet or the income excess calculation. Basically, for the commercial customer it is more a question of tax deferral or internal interest. Value added tax that can be reported has a psychological advantage rather than massive economic effects.


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