VAT car or margin car
What is it and how does it work?
It is important for entrepreneurs to know whether a used car is a so -called VAT car or a margin car . This is because, in the case of a VAT car, VAT still has to be paid on the purchase price at the time of purchase and can usually also be reclaimed. With a margin car, the price always includes the previously paid VAT.
If a company or entrepreneur buys a new car or VAT car, VAT will also be stated on the invoice in addition to the purchase price. This must also be paid, but can be fully reclaimed in almost all cases. As soon as the entrepreneur sells the car again later, he has to levy VAT on the sales amount again. If the car is bought by another entrepreneur, they can reclaim the VAT. In the case of a financial leasing of a VAT car, the VAT must be paid in one go. Entrepreneurs can then also reclaim this VAT.
What is the difference between a VAT car and a margin car?
VAT is levied on every new car delivered in the Netherlands. A private individual must simply pay that VAT. Entrepreneurs too, but they can usually reclaim this VAT from the tax authorities. As long as a VAT car only has business owners who pay and reclaim the VAT upon purchase, it will also remain a VAT car. Once a car has been owned by a private individual, it is and remains a margin car. The VAT can then no longer be reclaimed. For example, if a VAT car is traded in at a garage and then resold to a private individual, it automatically becomes a margin car.
VAT correction for private use of a company car
If someone uses a company car for private purposes (including commuting), VAT must be paid for the part that the car was used for private purposes. If there is a comprehensive kilometer registration, the exact amount of the VAT to be paid can be calculated via the calculation tool on the website of the Tax and Customs Administration. If there is no mileage administration, the flat rate for private use is 2.7% of the list price of the car, including VAT and BPM. It does not matter whether the car has been purchased or whether a financial lease or operational lease is used. In the case of a margin car, or a car that has been used by the company for more than 5 years, the fixed amount is 1.5%.