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Triangular Trade

Former Member
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Hi All,

I am new to the triangulation trade. Can someone please help me to understand this in simple words.

As per my current understanding . In triangulation trade 3 parties are involved A, B and C.

C will request the material from B which will be supplied from A to C on behalf of B.

Can you please help me with the understanding of the flow of transactional elements at A, B and C and at which step we are able to save tax.

Thanks in advance.

Regards,
Swapnil

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
0 Kudos

Hi Swapnil,

Triangular Trade serves 2 purposes (as I know):

1. Saves Tax for company

2. A process to pay royalty to holding company.

Example, lets say:

A is the producer in Denmark (A is part of the multinational company)

B is the invoicing company (B is also part of the multinational company) in Switzerland

C is the external customer for the company in India.

C places an order to company B to supply goods. C in turn places order to A to supply the goods directly to customer C.

Now company A delivers goods to C but invoices company B. The tax rates are either low or nil since it is intercompany within EU.

Company B will in turn invoice customer C with a low tax as the applicable tax rates are Swiss.

The company saves on the tax as the rates would have been higher if the customer was invoiced directly from company A.

Anil

Answers (1)

Answers (1)

0 Kudos

Hi,

You can refer to this link to get more details on Triangular deal.

http://help.sap.com/saphelp_erp60_sp/helpdata/en/55/13b953495bb44ce10000000a174cb4/content.htm?frame...

Best Regards,

Ayush

Former Member
0 Kudos

Hi,

lets have this identification

C - Customer

B  - Company B

A -  Company A   

Company B and A will be related entities.

When Customer orders goods from company B, there will be a sales order with the respective Sale Org however the supplying plant will be associated with Company A.

When the goods are shipped from Company A associated plant location

there will be one Intercompany Invoice from Company A to Company B

and Company  B will invoice customer i.e. C.

Company A will be the exporter of the record, However Importer of record can vary depending upon the situation.

In some cases Company B can be the importer of record and in some situations customer will be the importer of record.

Regards

Raj