Updated : 13/03/2017
When you buy or sell a new or used car in another EU country it can sometimes be tricky to work out what value added tax (VAT) you have to pay, if any, and in which country you have to pay it.
Use the tool below to help you work out what VAT you will have to pay or charge when buying or selling a car in the EU.
For VAT purposes, trailers and other motor vehicles are taxed in the same way as cars. Check the VAT rates applied in each EU country.
You always have to register your car in your country of residence and pay any associated registration and road taxes, regardless of whether you pay VAT or not.
You have to pay VAT in the country where you register the car, which is usually the country where you live.
You have to pay VAT on the total price of the car - this includes any accessories or associated costs, such as delivery charges.
If you pay VAT twice, both in the country of purchase and in the country of registration, you are entitled to a refund. You must take this up with the seller or the tax authorities in the country where you buy the car.
Mario lives in Italy and decides to buy a new car in Germany. As the car is new, VAT should be paid in Italy, where Mario wants to register it. But the seller is responsible for VAT payment to the German financial authorities and must prove that the car was meant to be transported and registered in another EU country. Therefore, he requires Mario to pay German VAT as a deposit.
Once Mario registers his car in Italy and pays VAT there, he can send the proof to the German seller and ask for a refund of the VAT he paid in Germany.
You don't have to pay VAT on the car.
You pay VAT at the local rate in the country where you buy the car. Check the VAT rates applied in each EU country.
The seller can choose to charge VAT:
In this case, the VAT will not appear on the invoice the seller gives you. This system is called second-hand margin and is the scheme used by most car dealers.
As a private seller, you don't have to charge VAT when you sell your car.
If you sell a new car to a customer in another EU country, the buyer will have to pay VAT on the car in the EU country where they choose to register it. In this case you will be able to get back a certain amount of VAT from the country where you initially bought the car.
The amount of refundable VAT will be calculated by the tax authorities in the country where you first purchased the car and should be proportional with the time you used the car.
Sofie buys a new car in Denmark for EUR 30 000 plus EUR 7 500 VAT (25%). Over 4 months, she drives the car for 7 000 km. She then decides to sell it to Jonas for EUR 16 000. The car is still considered new for tax purposes.
Jonas lives in Austria and brings the car there. He pays EUR 3 200 VAT to the Austrian tax authorities (20%, the VAT rate in Austria).
As the seller, Sofie should be aware that she can recover some VAT. If VAT on the second sale had been charged in Denmark, the amount payable would have been EUR 4 000 (25% of EUR 16 000). As the car is still considered new, Sofie is therefore entitled to recover from the Danish authorities EUR 4 000 of the 7 500 in VAT she paid when she bought the car.
As a private seller, you don't have to charge VAT on the sale.