Margin cars: where you buy decides your VAT
A margin car is not a type of car. It is a consequence of who you buy it from. Buy from a private seller and you may apply the margin scheme, paying VAT on your profit instead of on the full sale price. That makes where you source not a detail but the start of your calculation.
What a margin car is
Under the margin scheme you settle VAT on the difference between your purchase price and your sale price, not on the full sale price. That VAT is inside your margin, so you do not add it on top.
The scheme exists because VAT was already paid once on that car, by the private buyer who bought it new. Without it, the same car would be fully taxed again at every resale.
When you may apply it
The main rule is simple: the seller could not deduct VAT themselves. In practice that means these groups:
- a private seller, by far the largest group
- a business exempt from VAT
- another dealer selling the car under the margin scheme
Buy from a VAT-registered business that could deduct the VAT and it is a VAT car, so the margin scheme does not apply. You then sell it with VAT on the full price.
Belgium calls it the profit margin scheme, the Netherlands the margeregeling and Germany the Differenzbesteuerung. The core is the same in all three.
An example
You buy a car from a private seller for 8,000 euro and sell it for 10,000 euro. Your margin is 2,000 euro. At a 21 percent rate you pay 21/121 of that margin, roughly 347 euro. More than 1,650 euro remains.
The same car as a VAT car: you charge 21 percent on the full 10,000 euro. That is a very different number, which is exactly why a dealer looks at the seller first and at the car second.
Where those cars come from
Margin cars come from private sellers. So you do not find them in a dealer inventory or on a trade platform, but among the ordinary listings on 2dehands, Marktplaats, AutoScout24 and Mobile.de.
And that is the real problem. A sharply priced private listing is often gone within the hour. Refreshing five marketplaces by hand means you arrive second by definition.
Frequently asked questions
What exactly is a margin car?
A car you buy from someone who could not deduct VAT, usually a private seller. You then sell it under the margin scheme and pay VAT on your profit margin instead of on the full sale price.
What is the advantage of a margin car?
You pay VAT on the difference between purchase and sale, not on the full sale price. On a 10,000 euro car with a 2,000 euro margin that is a multiple of difference.
Can a margin car become a VAT car?
No, not just like that. The character follows from the purchase. A car bought under the margin scheme is sold under the margin scheme. If you doubt a specific car, put it to your accountant.
Can I buy a margin car as a private individual?
Yes. For you as the buyer it makes no difference: you simply pay the asking price. The difference is what the seller pays over to the tax authority. And whether they may put VAT on the invoice.
Where do I find cars from private sellers?
On the ordinary listing platforms, mixed in with dealer stock. Autoflip filters out private listings across five platforms at once and sends you a message within seconds.
This page explains the main rules and is not tax advice. For your own situation, certainly for import, export or cross-border trade, ask your accountant or the tax authority.
Margin or VAT: how to tell · Purchase declaration for private sales · What a car dealer earns per car · Buying cars from private sellers