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Last checked: 05/06/2020

VAT when buying or selling a car

Affected by Brexit?

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 only have to pay VAT in the country where you register the car. VAT should be charged on the total price of the car - this includes any accessories or associated costs, such as delivery charges.

The private seller will be able to get back a certain amount of VAT from the country where they initially bought the car. The amount of refundable VAT will normally be calculated by the tax authorities and will be proportional to the time that the seller used the car in the EU country. For details on rules concerning the seller's obligations and how to get this VAT refunded, the seller must contact the national tax authorities .

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

You have to pay VAT in the country where you register the car. VAT should be charged on the total price of the car - this includes any accessories or associated costs, such as delivery costs.

If you are buying the car in one EU country and you intend to take and register it in another EU country, you need to inform the car dealer so you don't pay VAT there.

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 first with the seller or, as a second step, with 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. However, the seller is responsible for the VAT payment to the German financial authorities and must prove that the car is meant to be transported and registered in another EU country. Therefore, he requires Mario to pay German VAT as a guarantee.

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.

When you buy a used car from a car dealer, the VAT may or may not be charged and mentioned separately on the invoice.

This depends on how the dealer opts to calculate VAT on this car. Find more on VAT applicable rules or consult the VAT authorities in the country where you are buying the car for further details.

You don't have to pay VAT when you bring back a used car to another EU country. But you must register the car in the country where you permanently live and pay registration and road tax there.

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 to the length of 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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