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title: "Triangular transactions"
canonical: "https://wiki.soft1.eu/space/SS5EN/805732353/Triangular%20transactions"
format: markdown
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**Triangular** **transactions **involve three taxable parties (e.g. A, B and C), with goods being delivered directly from the first party (A) to the last (C). Each triangular transaction consists of a single delivery (Physical distribution) but with two invoicing actions.

Such transactions (wholesale/retail) can take place between Trading parties within the boundaries of a country, Third Countries or even Member states of the EU. Specifically for transactions between EU Member states, the simplified process for intra-EU triangular transactions is usually applied. This typically happens when multinational companies engage in transactions with each other, particularly buying and selling goods or providing services, because:

- Their tax liabilities are reduced through transfer pricing.
- They conduct acquisitions/deliveries without necessarily having obtained VAT registration in each member state they trade with.
- Bureaucratic procedures for the three taxable parties are minimized, ensuring full informing all three Member states, particularly the one responsible for VAT collection on the intra-EU acquisition.

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> ℹ️ 💡 The triangular transaction fields are involved in the Pricing Policy conditions.
> ℹ️ 
> ℹ️ 💡 In the Purchase - Sales parameters *(other → other)* you can set whether **changing the main Trading party **in the Document header will automatically **Delete Triangular trading party data.**

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> ℹ️ 💡The conversion of triangular transactions operates as described above, for any transaction behavior set in the Document (e.g., Order, Shipping Invoice, Self-delivery, etc.).
> ℹ️ 
> ℹ️ 💡The above-described process is similar to the one used in the Related jobs **Documents processing** and **Copy document**.
> ℹ️ 
> ℹ️ In contrast, in the Related jobs:
> ℹ️ 
> ℹ️ - **Reversal** and **Re-issue by cancelling with reversal**, the new Document keeps/maintains the main Trading party, as well as the Trading parties of triangular transactions involved in the initial Document.
> ℹ️ - **Transfer to → Create Contracts**, to keep/maintain the main Trading party of the initial Document.

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#### ➡️<span style="color: #0747a6">** Examples in ERP**</span>

##### <span style="color: #4c9aff">→</span><span style="color: #ff991f"> Intra-EU transaction </span><span style="color: #ff991f">**(intermediary)**</span>

An example of a triangular transaction: A German company (customer) orders products from a Greek company. The Greek Co. (intermediary) asks an Italian Co. (initial supplier) to deliver these products directly to the German Co. The Greek Co. issues an invoice to the German Co. and receives an invoice from the Italian supplier. All three companies are subject to VAT and have a TRN.   


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##### <span style="color: #4c9aff">→</span><span style="color: #ff991f"> Intra-EU transaction </span><span style="color: #ff991f">**(initial supplier)**</span>

Another example of a triangular transaction: A German company (customer) orders products from an Italian company. The Italian Co. (intermediary) asks a Greek Co. (initial supplier) to deliver these products directly to the German Co. The Italian Co. issues an invoice to the German Co. and receives an invoice from the Greek supplier. All three companies are subject to VAT and have a TRN.