Updated : 09/06/2015
Private sellers can recover VAT from their country's authorities when they sell a new car to a buyer based in another EU country so that VAT is not paid twice on the same vehicle.
Merete buys a new car in Denmark for 20 000 euros plus 5 000 euros VAT (25%). Four months later, she sells the car (still considered new for tax purposes) to Hagen for 16 000 euros.
Hagen lives in Austria and moves the car there. He pays 3 200 euros VAT to the Austrian tax authorities (20%, the going rate of VAT in Austria).
Merete, as the seller, must know her rights in this situation. If VAT on the second transaction had been charged in Denmark, the amount payable would have been 4000 euros (25% of 16 000 euros). Because the car is still considered new, Merete is entitled to recover from the Danish authorities 4 000 of the 5 000 euros in VAT she paid when she bought the car.
A car sold in the EU is considered new if:
If you are a private individual in the EU selling your used car to a buyer based in the EU, no VAT is due on the transaction – either in your country or the buyer's country of residence.
A car is considered second-hand if:
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In this case, the 27 EU member states + Iceland, Liechtenstein and Norway