Difference taxation, calculation
February 12, 2010 | 30,00 EUR | answered by Dipl.BW/SB Ulrich Stiller
Dear Sir or Madam,
I am a full-time bricklayer and have additional income from self-employment, meaning I buy and sell accident vehicles, which may be repaired and then either exported or resold domestically. I am not sure if I have understood § 25 UStG correctly, which is why I have the following question:
The suppliers of the accident vehicles often invoice me without VAT shown, in accordance with § 25a UStG (difference taxation). If I have the accident vehicles repaired and then resell them, am I also subject to difference taxation according to § 25a UStG?
In the event that the accident vehicle has been repaired and I have incurred additional costs (workshop, painter, upholsterer, etc.), I have organized everything, commissioned and paid for it, that is, an additional service has been provided. Does my difference or the "taxable basis" for difference taxation calculate between the purchase and sale price including the costs?
Example: Purchase price of 10,000 euros + repair costs of 1,000 euros = 11,000 euros. Selling for: 12,000 euros, i.e. a profit margin of 1,000 euros, which is subject to difference taxation, so: 190 euros.
Thank you very much for answering my question. Please mention the relevant paragraphs in your response. Thank you!
Best regards,
Dear inquirer,
Thank you for your inquiry, which I would like to answer based on the information you provided and in the context of your situation within the scope of an initial consultation as follows:
Your question is governed by Section 276a of the 2008 VAT Guidelines (UStR 2008) in relation to § 25a of the VAT Act, specifically in paragraph 8, which states:
"If a second-hand item is sold by the reseller according to § 1 para. 1 no. 1 sentence 1 of the VAT Act, the basis for assessment is the amount by which the selling price exceeds the purchase price of the item; the VAT included in the difference must be deducted. Additional costs incurred after the purchase of the item, such as repair costs, which are not included in the purchase price, do not reduce the basis for assessment. In the case of self-imported works of art, collectibles, or antiques included in the margin scheme according to § 25a para. 2 no. 1 of the VAT Act, the purchase price is the value of the imported item determined according to the rules on customs value plus the import VAT. In the case of § 25a para. 2 sentence 1 no. 2 of the VAT Act, the purchase price includes the VAT invoiced by the supplier."
In your case, you are subject to the margin scheme for the difference between 12,000 and 10,000 euros, which is 2,000 euros, where the VAT is not part of the basis for assessment. You now need to deduct the VAT from the 2,000 euros, which is 2000 x 19/119 = 319.33.
I hope I was able to assist you with my explanation.
Sincerely,
Ulrich Stiller
Tax Advisor
