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Last checked : 24/01/2019

VAT when buying or selling a car

Check what VAT is due when buying or selling a car in the EU or when buying a car outside the EU for import to the EU.

The information on this page covers VAT rules when buying or selling a car as a private person, it does not deal with business to business transactions.

 

Are you buying or selling a car?

 

Where are you buying it from?

 

If you are buying a car from another EU country, you don't need to pay customs duty when bringing your car to your country of residence.

Who is the seller?

 

 

If you buy a car from a private seller, you don't need to pay VAT in the country of the seller. You have to pay VAT in the country where you register the car, which is usually 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 have paid 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 have bought the car.

 

You don't have to pay VAT on the car.

 

 

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 have paid 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 have bought the car.

Sample story

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.

The date taken into account for the supply of the car differs from country to country. It can be either the moment when you sign the purchase order or the moment when the invoice is issued.

You pay VAT at the local rate in the country where you buy the car. Check the VAT rates applied in each EU country.

 

You don't have to pay VAT when buying a used car. You will need to register the car in the country where you live and pay registration and road tax there.

The seller can charge VAT only on the profit generated by the selling.

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.

Consult the VAT authorities in your country for further details.

 

You have to pay customs duty and import VAT, as with any other imported goods.

Consult the customs and VAT authorities in your country for details on the customs declaration, tax payments or tax relief.

 

Is the car new or used?

 

As a private seller, you don't have to charge VAT when you sell your car.

If you sell a car classified as 'new' 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.

Sample story

Recover some of the VAT you paid if you sell your new 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.

The date taken into account for the supply of the car differs from country to country. It can be either the moment when you sign the purchase order or the moment when the invoice is issued.

 

As a private seller, you don't have to charge VAT on the sale.

 

FAQs

EU legislation

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