Chain Transactions in Dropshipping – Part Three

Alternative: D Orders the Parcel Transport in Poland Himself

If the actor who orders the transport in the chain business is in the middle of the chain, i.e. a taxpayer who acts both as an acquirer and as a seller in the chain transaction, both Hungarian VAT law and German VAT law and the Community VAT Directive assume that he ordered the transport as a buyer (customer), but this presumption can be refuted by the parties.

The definition of the buyer or seller quality is very important, because if the middleman orders the transport as buyer, the first transaction between the Polish supplier and D is considered an active delivery. If he orders the transport as a seller, the final transaction between D and the end consumer becomes the active delivery. That is, in the case of an international chain transaction, the place of performance of the active delivery transaction is different depending on whether the middleman orders the carriage as the seller or the buyer.

German and Hungarian VAT Law Analysis

Since D is a company registered in Germany, German VAT law applies:

– If a middleman (i.e., D) orders the transport, this alone is not sufficient.
– The Polish manufacturer must indicate their Polish VAT identification number.
– This VAT number must be checked in the EU database.
– Summary declarations must be submitted by the Polish seller.
– The intermediary must have tax numbers in multiple Member States (in this case, Poland and Hungary).
– Hungarian VAT law (Section 27 and 29) contains similar provisions, with rules for threshold limits.

VAT Rules Table Comparison

Criteria	German VAT Law (UStG)	Hungarian VAT Law (Áfa tv.)
Transport ordered by middleman	Presumption: buyer unless refuted	Same presumption applies
VAT ID requirement	Must indicate Polish VAT ID	Must have Polish and Hungarian VAT IDs
Declarations	Polish seller must file summary reports	Same requirement applies
Threshold rule for private consumer	N/A (covered under place of supply rules)	EUR 35,000 threshold applies
Taxable transaction location	Depends on buyer/seller role of middleman	Depends on buyer/seller role and consumer status

Summary

If the end consumer is a private individual and the courier service is commissioned by the Polish manufacturer, then VAT must always be declared in the consumer’s country of residence. The first transaction between the Polish manufacturer and D is taxed at 0% VAT. If the end consumer is in Hungary and D exceeds net sales of EUR 35,000, Hungarian VAT must be declared. Otherwise, Polish VAT applies.

Dr. Katona Géza, LL.M. ügyvéd (Rechtsanwalt / attorney at law)

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