VATNIEU5350 | Simplifications: processing of goods: processing in two member states

Use this link to view Processing two MSs diagram

Here, Principal (A) in state 1 (MS1) has its goods processed consecutively in different states. The first processor (B) in member state 2 (MS2) sends the part-processed goods on to the second processor (C) in member state 3 (MS3). The finished goods are eventually returned by C to A in MS 1.

B and C are supplying processing services to A who will account for the VAT due on each supply as a reverse-charge. The movements of goods between the member states (which would otherwise amount to transfers of own goods by A) are disregarded as supplies and acquisitions.