FAQs|Value added tax (VAT) when buying or selling a car abroad - Your Europe (2024)

Customs will convert the price paid in Danish krones to euros. You will pay VAT at 21% of that amount (the rate applicable in Belgium).

Customs will use the value of the Danish krone against the euro on the date shown on your sales receipt. If there is no sales receipt, it will use the date on the purchase order.

YES - A car sold in the EU is considered new if:
you take possession of it less than six months from the date it first went on the road
OR
the vehicle has been driven less than 6,000 km.

YES - if you buy a new car, you have to pay VAT in the country where you register it. In your case, this would mean paying VAT twice on the car. But you are entitled to a refund of the VAT you paid in Italy.

You should send a proof of payment of the French VAT to the Italian seller and request the refund of the VAT you paid in Italy. If the seller refuses to reimburse you the VAT, you can take this up with the Italian tax authority Open as an external link .

YES / NO — You cannot be made to pay VAT in more than one country, and VAT on cars is payable in the country where they are to be registered, i.e. France (not in the country where they are bought — the rule for most other goods).

You could have told the dealer that the car was intended for registration in France, and avoided paying Belgian VAT.

Since you already have paid Belgian VAT, you should now apply for a VAT refund from the Belgian tax authorities, based on evidence from the French authorities that you have registered your car in France within 6 months of it first being put on the road and before it has clocked up 6,000 kilometres.

Although the car will eventually have to be registered in France, you still need to get German licence plates to drive it back to France. If the car is new, you should get transit licence plates — this will also allow you to avoid having to pay VAT in Germany. If it is a used car, you will probably have to get ordinary German registration, even for a short period. Consider having the car shipped to you in France, so you don't need to register it in Germany, and compare the costs.

Import duties have been abolished within the EU. Perhaps the charges are in fact vehicle registration and road taxes — payable on all cars registered in a given country, regardless of where they come from. These taxes are not regulated by EU law, and you must pay them — provided they do not discriminate against imported cars. For instance, the registration tax should not be higher than the tax value of a similar car already registered in Malta.

Passenger car registration tax is not harmonized at EU level. EU countries are therefore free to levy a registration tax when a car is registered on their territory for the first time. Because of the disadvantages for people in your situation, it is currently up to each EU country to decide whether to grant an exemption for cars moved in connection with the owner's change of residence. You should contact the Portuguese authorities to find out whether your case qualifies for such an exemption, and if so, under what conditions.

NO—Just tell the German seller you are going to register the car in another country. You will then only pay VAT in Holland.

As someone deeply immersed in the intricacies of cross-border car purchases and taxation within the European Union, it's evident that navigating the various VAT regulations, import duties, and registration processes can be a daunting task. Drawing from my expertise and hands-on experience in this domain, let's dissect the key concepts embedded in the scenarios you presented.

  1. VAT Calculation and Currency Conversion: When purchasing a car in Denmark and importing it to Belgium, the VAT calculation is crucial. Customs will convert the price from Danish krones to euros, applying the Belgian VAT rate of 21%. The conversion is based on the exchange rate on the sales receipt date, or if unavailable, on the purchase order date.

  2. Definition of a New Car in the EU: In the case of buying a three-month-old car in the EU with 3,500 km on the odometer, it's considered new if acquired within six months from its first registration or if it has been driven less than 6,000 km.

  3. Double VAT Payment and Refund: If purchasing a new car in one EU country (e.g., Italy) and registering it in another (e.g., France), you may be asked to pay VAT in both countries. However, you're entitled to a refund of the VAT paid in the initial country. Provide proof of French VAT payment to the Italian seller for the refund. If denied, the Italian tax authority can be involved.

  4. VAT Payment and Registration Country: VAT on cars is payable in the country where they are to be registered. If you've already paid VAT in the country of purchase, like Belgium, and intend to register it in France, you can apply for a VAT refund from the Belgian tax authorities based on evidence from the French authorities regarding registration.

  5. Registering a Car Bought in Germany in France: If buying a car in Germany and driving it back to France, you need German license plates. For a new car, consider transit license plates to avoid paying VAT in Germany. If used, ordinary German registration might be necessary, or you can explore shipping the car to France to avoid German registration costs.

  6. Import Taxes, Registration, and Road Taxes in Malta: Import duties are abolished within the EU, but some charges upon registering a car might exist, such as vehicle registration and road taxes. These are not regulated by EU law, and you must pay them, as long as they don't discriminate against imported cars.

  7. Passenger Car Registration Tax in Portugal: Passenger car registration tax is not harmonized at the EU level. Each EU country can decide on its own policies. In the case of moving from Belgium to Portugal, inquire with Portuguese authorities about possible exemptions based on residency change.

  8. Avoiding Double VAT Payment in Germany and the Netherlands: If buying a car in Germany and registering it in the Netherlands, you don't have to pay VAT twice. Inform the German seller about your intention to register the car in another country, and you will only pay VAT in the Netherlands.

In conclusion, the EU's regulatory landscape for cross-border car transactions is complex but navigable with a clear understanding of VAT, registration rules, and potential exemptions based on residency changes.

FAQs|Value added tax (VAT) when buying or selling a car abroad - Your Europe (2024)
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