VAT margin scheme on second hand cars

"New vehicles" are motor vehicles, which are:

• bought no more than 6 months after the date of their first registration, or
• they have not traveled more than 6 000 km.

"Second hand vehicles" are motor vehicles, which are not "new vehicles".

Dealer of second hand goods is a tax liable person, who in the process of his/her economic activity purchases, acquires or imports second hand goods with purpose to sell them.

The provisions of VAT margin scheme on second hand cars may be applied if the second hand cars have been bought by:

• a tax non-liable person (an individual);
• a tax liable person, which is not VAT-registered;
• another dealer, applying the special procedure for levying the margin of the price.

The tax base of the delivery of goods under provisions of VAT margin scheme is the margin of the price, which represents the difference between:

• the sale price;
• the purchase price.

In the invoice the dealer shall indicate "regime of taxation of margin – second hand goods".

This article does not describe the VAT tax credit for vehicles. This is described at: VAT tax credit for vehicles.