How does the differential taxation work for second-hand dealers?
February 7, 2023 | 40,00 EUR | answered by Felix Schönecker
Dear tax advisor,
I run an online shop for used electronic items and I am unsure about how the differential taxation works for used goods dealers. I have read a lot about the topic, but I still lack a clear understanding of the exact procedures and requirements.
Currently, I am selling my products with regular sales tax. However, since I buy and resell many of my goods used, the differential taxation may be more advantageous for me. I am concerned that I may be incorrectly calculating or remitting taxes, which could lead to legal problems.
So my question to you is: How exactly does the differential taxation work for used goods dealers? What requirements do I need to meet and what specific steps do I need to take in order to benefit from this taxation procedure? Are there any potential pitfalls or special considerations I should be aware of?
I would greatly appreciate a detailed explanation and specific instructions on how to correctly apply the differential taxation. Thank you in advance for your assistance.
Sincerely,
Fanni Melzer
Dear Mrs. Melzer,
Thank you for your question regarding the margin scheme for second-hand goods dealers. The margin scheme is a special taxation procedure that may be of interest to dealers of second-hand goods, as it allows them to pay VAT only on the difference between the purchase and sale price.
In order to benefit from the margin scheme, as a second-hand goods dealer, you must meet certain requirements. First and foremost, you must sell exclusively used items that you have acquired from private individuals or other businesses. New goods are excluded from the margin scheme.
Furthermore, you must acquire and resell the goods within the scope of your business. This means that you must not purchase the goods for personal use. Additionally, you must explicitly indicate the margin scheme in your accounting and issue the corresponding invoices accordingly.
To correctly apply the margin scheme, you must determine the difference between the sale price and the purchase price and calculate the VAT on that difference. This VAT is then separately stated on the invoice. It is important that you accurately document all necessary information in your accounting and fill out your VAT return accordingly.
There are some pitfalls to watch out for when applying the margin scheme. For example, you must ensure that all requirements for the application of the margin scheme are met and that you keep proper records and evidence. Additionally, you should regularly stay informed about changes in legislation to stay up to date.
I hope this information is helpful to you and that you can correctly apply the margin scheme for your online shop. If you have any further questions or need assistance, I am happy to help.
Best regards,
Felix Schönecker
