Buying and sellings cars

Buying a car means always paying VAT?

What about buying a used car in another EU country and what about selling?

These and many other questions concerning buying and selling cars in the EU will be answered.

For example, VAT may not always be paid or mentioned separately in the invoive when you buy an second hand car ( old car means more than 6000 km and 6 month old) from a car dealer. That´s why the dealer has two options to calculate VAT on the sale of second hand cars. For explanation on VAT payment on used cars, see the margin scheme for second hand goods.

Margin scheme for second hand goods

Who is covered Optional or obligatory How does it work
Businesses (taxable dealers) of the following goods:

  • second-hand goods (excludes precious metals and stones),
  • works of art,
  • collectors’ items,
  • antiques.

Annex IX VAT Directive

Obligatory for EU countries.

Optional for business.

Taxable dealers who choose to use it will pay VAT on their profit margin (difference between buying and selling price). They will not charge or deduct any VAT on transactions covered by this scheme.

If VAT was paid upon purchase or importation of such goods (e.g. if purchased from a creator or from a taxable person not applying this scheme) a dealer can choose not to apply the scheme to a supply of any of these goods.

In this case, the standard VAT arrangements apply, and they can deduct the VAT when VAT on the supply becomes chargeable.

The goods supplied outside the EU are exempt from VAT.

Articles 311-325 and 342-343 VAT Directive.

info@asesoriafiscalponte.com

If you are not a business or taxable dealer and buy or sell a car as  a private person find more here:

EU Taxation

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