MwSt. ausweisbar - VAT deductable on used cars

Hallo Beatriz,

it is actually quite simple. If you are a registered company - self employed (have trade certificate / gewerbeschein or owner of a company), or if a company is providing you a benefit of buying a car, you are exempt from % of VAT. on new and used cars.  In those instances you simply flip the proof and they treat you like royalty. The benefit for the Car Sales people it that it is the ideal customer to have : every 3 years you qualify for new models, service plans etc.
However, for those that do not get car benefit, the only sales target Car Salesmen have it so sell you a financing plan. That is why the 3rd option, buying cash, is absolutely abhorred by them because the sale alone contribute only a negligible part. Car sales people work in a pyramid scheme, with the most senior people getting the highest value customers automatically and the "blokes at the bottom" that have to take what is left. All of them have to sell a contingencies of cars of which financing+insurance contributes >70% towards their yearly bonus.
For the average Joe, buying a car privately, the financing contract is sowed with eloquently worded thorns : with extreme fine print - risk stipulations etc. (what happens when you miss a single payment, someone else totals your car, value on lease return with a micro scratch, your boyfriend borrows it, etc. etc.). That is why they will also bundle the insurance - ie a doppelarschkarte.  So buying the car is ca. 25% of your overall effort and 75% is comparing the various financial offers and insurances. Beware the of those rates that are too good to be true - but you probably know that already. If you are not native,  ask a few colleagues at work at lunchtime on how they did it.
have fun!

I suspect the question is gearing in a different direction:
All businesses have to pay MWSt on their turnover, private sellers do not.
Now, if business A buys from business B, they can deduct the MWSt paid to B from their own MWSt bill. Thus effectively they only pay the price excl. MWSt. Private buyers do not have that possibility.
Thus a seller who pays MWSt (and specifies it on the bill, which is what "ausweisbar" means) is better for a business buyer. For private buyers, it does not matter.
This applies to all sales, not just cars.

Johannes above seems to refer to loans for buying cars. That is not related to taxation.
I personally dislike spending more than I have, thus would not buy on loan.

When I bought my car used, I was told there was no VAT on used cars.

Maje

Maje Brennan wrote:

When I bought my car used, I was told there was no VAT on used cars.

With very few exceptions, there is VAT on everything you buy from a business, and none on things you buy from private sellers.

beppi wrote:

I suspect the question is gearing in a different direction:
All businesses have to pay MWSt on their turnover, private sellers do not.
Now, if business A buys from business B, they can deduct the MWSt paid to B from their own MWSt bill. Thus effectively they only pay the price excl. MWSt. Private buyers do not have that possibility.
Thus a seller who pays MWSt (and specifies it on the bill, which is what "ausweisbar" means) is better for a business buyer. For private buyers, it does not matter.
This applies to all sales, not just cars.

Johannes above seems to refer to loans for buying cars. That is not related to taxation.
I personally dislike spending more than I have, thus would not buy on loan.

Thanks for this, I am looking for an answer more into this direction yes. So let's use an example to be easier. Imagine I am a dealer A and I buy from a dealer B a car of 4800€ that says "VAT deductible (22%)". And then I resell it to a private customer C, by 6800€.  What is the VAT margin that I will have to pay here? From what I got I will only have to pay the price without VAT when I buy it from dealer B, but what if I resell it? I believe this will also change if it is a local sale (inside germany) or not

Thanks so much for all your answers, I am getting closer to understand all of this

BeatrizAzevedo wrote:

beppi wrote:

I suspect the question is gearing in a different direction:
All businesses have to pay MWSt on their turnover, private sellers do not.
Now, if business A buys from business B, they can deduct the MWSt paid to B from their own MWSt bill. Thus effectively they only pay the price excl. MWSt. Private buyers do not have that possibility.
Thus a seller who pays MWSt (and specifies it on the bill, which is what "ausweisbar" means) is better for a business buyer. For private buyers, it does not matter.
This applies to all sales, not just cars.

Johannes above seems to refer to loans for buying cars. That is not related to taxation.
I personally dislike spending more than I have, thus would not buy on loan.

Thanks for this, I am looking for an answer more into this direction yes. So let's use an example to be easier. Imagine I am a dealer A and I buy from a dealer B a car of 4800€ that says "VAT deductible (22%)". And then I resell it to a private customer C, by 6800€.  What is the VAT margin that I will have to pay here? From what I got I will only have to pay the price without VAT when I buy it from dealer B, but what if I resell it? I believe this will also change if it is a local sale (inside germany) or not

Beppi made a good post. Seems it was not properly understood. What one needs to know is that the VAT, which by the way in Germany is either 19% , 7% or 0 - and not 22% unless there is some kind of special rate that I have not heard of but this is very doubtful.

But the thing is that while a private seller won't charge VAT, a dealer will, whether selling to another dealer, business or a private person. A private buyer only cares about the end price but he also has to pay the VAT if buying from a dealer, he just can't write it off on taxes. For a dealer, it is important that he has a proper bill showing any VAT paid since this will be needed for his book keeping and taxes.

BeatrizAzevedo wrote:

Thanks for this, I am looking for an answer more into this direction yes. So let's use an example to be easier. Imagine I am a dealer A and I buy from a dealer B a car of 4800€ that says "VAT deductible (22%)". And then I resell it to a private customer C, by 6800€.  What is the VAT margin that I will have to pay here? From what I got I will only have to pay the price without VAT when I buy it from dealer B, but what if I resell it? I believe this will also change if it is a local sale (inside germany) or not

If dealer A buys a car from dealer B for 4800€, the bill will show that €766,39 of this amount is VAT (19% - only essentials like foodstuff and books have 7% in Germany).
If dealer A then sells the car for 6000€, his bill to the buyer will show €957,98 VAT, but in fact he will have to pay to the tax authority only €191,59, because the rest will be paid by dealer B.
That's why the German term is MWSt or Mehrwertsteuer, meaning "added value tax": Dealer A has to pay it on the €1200 value he added to the item sold.

Thanks a lot for your help Beppi and Tomin, I finally understood it with your comments! Ps. the 22% of VAT was because I was checking a car from Italy.

Have a great weekend!

beppi wrote:

BeatrizAzevedo wrote:

Thanks for this, I am looking for an answer more into this direction yes. So let's use an example to be easier. Imagine I am a dealer A and I buy from a dealer B a car of 4800€ that says "VAT deductible (22%)". And then I resell it to a private customer C, by 6800€.  What is the VAT margin that I will have to pay here? From what I got I will only have to pay the price without VAT when I buy it from dealer B, but what if I resell it? I believe this will also change if it is a local sale (inside germany) or not

If dealer A buys a car from dealer B for 4800€, the bill will show that €766,39 of this amount is VAT (19% - only essentials like foodstuff and books have 7% in Germany).
If dealer A then sells the car for 6000€, his bill to the buyer will show €957,98 VAT, but in fact he will have to pay to the tax authority only €191,59, because the rest will be paid by dealer B.
That's why the German term is MWSt or Mehrwertsteuer, meaning "added value tax": Dealer A has to pay it on the €1200 value he added to the item sold.

Beppi, are you also aware of how it works when the sale is not local (from other country to Germany)? So, let's say I buy that car from Italy. I would have to pay that 22% of VAT when I purchase it . Then, It arrives to Germany.  And I re-sell it again for a private customer for 6000€. Should I receive any VAT back when it arrives to Germany? What is my VAT margin in this situation?

BeatrizAzevedo wrote:

beppi wrote:

BeatrizAzevedo wrote:

Thanks for this, I am looking for an answer more into this direction yes. So let's use an example to be easier. Imagine I am a dealer A and I buy from a dealer B a car of 4800€ that says "VAT deductible (22%)". And then I resell it to a private customer C, by 6800€.  What is the VAT margin that I will have to pay here? From what I got I will only have to pay the price without VAT when I buy it from dealer B, but what if I resell it? I believe this will also change if it is a local sale (inside germany) or not

If dealer A buys a car from dealer B for 4800€, the bill will show that €766,39 of this amount is VAT (19% - only essentials like foodstuff and books have 7% in Germany).
If dealer A then sells the car for 6000€, his bill to the buyer will show €957,98 VAT, but in fact he will have to pay to the tax authority only €191,59, because the rest will be paid by dealer B.
That's why the German term is MWSt or Mehrwertsteuer, meaning "added value tax": Dealer A has to pay it on the €1200 value he added to the item sold.

Beppi, are you also aware of how it works when the sale is not local (from other country to Germany)? So, let's say I buy that car from Italy. I would have to pay that 22% of VAT when I purchase it . Then, It arrives to Germany.  And I re-sell it again for a private customer for 6000€. Should I receive any VAT back when it arrives to Germany? What is my VAT margin in this situation?

***

I do not believe Tom is right above - but I am far from being an expert here (so better consult a tax professional!):
As far as I know, you can get VAT back when you export goods out of the EU, but NOT when they remain inside (i.e. when moving them from Italy to Germany).
However, if you are a business and re-selling the items for a higher price, you only have to pay German VAT on the difference to the buying price.
You may have to submit the VAT on the full price at first, but may get it back with the yearly tax declaration.
(Remark: This applies only if you are a business. Private buyers would have to pay the full Italian VAT and then sell in Germany without VAT. BUT: The tax authority, not you, decides whether you are a business, and will do so if you buy and sell several cars and make a profit. In that case you'd be charged the full German VAT on top of the Italian one you already paid.)

beppi wrote:

I do not believe Tom is right above - but I am far from being an expert here (so better consult a tax professional!):
As far as I know, you can get VAT back when you export goods out of the EU, but NOT when they remain inside (i.e. when moving them from Italy to Germany).
However, if you are a business and re-selling the items for a higher price, you only have to pay German VAT on the difference to the buying price.
You may have to submit the VAT on the full price at first, but may get it back with the yearly tax declaration.
(Remark: This applies only if you are a business. Private buyers would have to pay the full Italian VAT and then sell in Germany without VAT. BUT: The tax authority, not you, decides whether you are a business, and will do so if you buy and sell several cars and make a profit. In that case you'd be charged the full German VAT on top of the Italian one you already paid.)

Yes, Tom is wrong. However, the original post is very imprecise because there was not sufficient information, so we all took chances on making assumptions. There is a lot of if's and some of the original post information also got added afterwards. For example, some assumptions have not been clarified :

a) Second hand car - Is it a laymen definition of secondhand or the EU definition? Not all cars that are not brand new is second hand (there is km and date of purchase) that influence the definition.
b) was the car Purchased in Italy but from a 3rd Country?
c) Was the new car purchased by a business or a private party
d) Was it bought from an auction
e) is the car already registered in Germany
f) is it a purchase between businesses for resale to another business or
g) is the dealer purchaser a reseller to a private person
h) is the final buyer in Germany, Poland, Romania or still unknown
i) ... and 20 more questions.

Hence, I assumed the simplest case above as private buyer. At this stage, I would recommend that the OP first read the EU guideline here : https://ec.europa.eu/taxation_customs/i … g-cars_en, then start a new thread where all the details is clear history who buys what, and the roles involved. I retract my response email because details are still unclear.