Triangular VAT Simplification in Complex EU Supply Chains: Lessons from Case T-646/24

The EU General Court’s judgment in case T-646/24, delivered on 3rd December 2025, clarified the application of the VAT simplification regime for triangular transactions within complex intra-EU supply chains. The case addressed whether this simplification, typically applicable to three parties (the ABC scheme), could also apply to chains involving four operators (a “quadrangular transaction”).

The dispute involved a Slovenian intermediary (B) who bought goods from a German supplier (A) and resold them to Danish companies (C), with the goods transported directly from Germany to a fourth operator (D), the customer of the Danish company. The Slovenian tax administration argued that the simplification was inapplicable because the goods reached the fourth operator, rather than the third.

The Court ruled that the key to a supply is the transfer of the power to dispose of tangible property as owner, not the physical location where the transport ends. The simplification regime is not excluded simply because the single transport operation concludes at the premises of the fourth operator. This ruling endorses the use of the triangular simplification mechanism even in chains involving four parties, provided all other objective conditions are met.

However, the Court emphasised an anti-fraud caveat: the simplification can be denied if the operator invoking it knew, or had reason to know, that they were participating in a fraudulent chain.