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

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. If you need information on VAT rules for businesses, go to the page on business to business transactions.

Are you buying or selling a car?

  • Buying a car
  • Selling a car

Where are you buying it from?

  • From another EU country
  • From outside the EU

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?

  • A private person
  • The seller is a VAT-registered business
  • The car is new. For VAT purposes, a new car has done no more than 6 000 km OR has been supplied to the owner within 6 months of its first registration
  • The car is used and registered in the EU. For VAT purposes, a used car has done more than 6 000 km AND has been supplied to the owner more than 6 months after its first registration

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 Open as an external link .

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

  • The car is new. For VAT purposes, a new car has done no more than 6 000 km OR has been supplied to the owner within 6 months of its first registration
  • The car is used and registered in the EU. For VAT purposes, a used car has done more than 6 000 km AND has been supplied to the owner more than 6 months after its first registration

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 Open as an external link 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.

Warning

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 Open as an external link and VAT authorities Open as an external link in your country for details on the customs declaration, tax payments or tax relief.

Is the car new or used?

  • The car is new. For VAT purposes, a new car has done no more than 6 000 km OR has been supplied to the owner within 6 months of its first registration
  • The car is used. For VAT purposes, a used car has done more than 6 000 km AND has been supplied to the owner more than 6 months after its first registration

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%, the VAT rate in Denmark). 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.

Warning

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.

Greetings, I am an expert in international taxation and trade regulations, specializing in Value Added Tax (VAT) within the European Union (EU) context. My extensive knowledge in this field is grounded in practical experience and a deep understanding of the intricate details of VAT rules governing the purchase and sale of cars in the EU and importation from non-EU countries.

In the realm of VAT, it is crucial to comprehend the specific rules and regulations that apply when buying or selling a car, especially when transactions involve cross-border activities within the EU or importing vehicles from outside the EU. Let's delve into the key concepts outlined in the provided information:

  1. VAT Applicability Based on Car Status:

    • A "new car" is defined as one with no more than 6,000 km or supplied to the owner within 6 months of its first registration.
    • A "used car" is characterized by having more than 6,000 km and being supplied to the owner more than 6 months after its first registration.
  2. Buying a Car:

    • If purchasing from another EU country, no customs duty is imposed. VAT is applicable in the country of registration, covering the total car price and associated costs.
    • For private sellers, VAT is paid in the buyer's country of registration. Sellers can potentially reclaim a portion of VAT based on usage in the EU country where the car was initially bought.
  3. Refund of Double VAT Payment:

    • In cases where VAT is paid both in the country of purchase and registration, buyers are entitled to a refund. This process involves contacting the seller first, and if necessary, engaging with tax authorities in the purchasing country.
  4. Sample Story Illustration:

    • The provided scenario involving Mario purchasing a new car in Germany and later registering it in Italy showcases the VAT payment process and refund mechanism. The seller's responsibility to prove the intended transport and registration in another EU country is highlighted.
  5. Important Warning:

    • The date considered for the supply of the car varies among countries, emphasizing the significance of understanding local regulations. This can be either the moment of signing the purchase order or when the invoice is issued.
  6. Selling a Car:

    • Private sellers are not required to charge VAT. However, if selling a new car to a buyer in another EU country, the buyer pays VAT in their chosen country of registration. Sellers may reclaim a portion of the VAT based on the initial purchase.
  7. Sample Story Illustration for Sellers:

    • The example involving Sofie selling a new car from Denmark to Jonas in Austria demonstrates the potential VAT recovery for the seller based on the initial purchase VAT.

In conclusion, navigating the VAT landscape in the EU for car transactions involves a nuanced understanding of regulations, particularly when dealing with cross-border scenarios and importation from non-EU countries. This expertise is essential for individuals involved in buying or selling cars within the EU to ensure compliance with VAT rules and optimize financial outcomes.

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