VATNMT8600 - Treatment of specific cases discussed at Lisbon: New means of transport purchased under the second-hand margin scheme

Treatment in country of dispatch

Treatment in country of acquisition

Comment

A non-taxable person buys a new means of transport sold under the EU second-hand margin scheme in one member-state for removal to another. The use of the margin scheme means VAT is included in the selling price by default.

Tax is due on arrival in the member-state of destination.

This is a new means of transport and tax should not have been charged in the first member-state. It should have been treated as a zero-rated despatch and not sold under the margin scheme. The buyer should seek a refund in the other member-state.

Eligibility for a margin scheme should not affect the correct treatment of a new means of transport that is supplied for acquisition in another member-state.