VAT car or margin car
What is it and how does it work?
It is important for entrepreneurs to know whether a second-hand 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 on the 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, the invoice also shows VAT 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 charge VAT again on the sale amount. If the car is bought by another entrepreneur, they can reclaim the VAT. In the case of financial leasing of a VAT car, the VAT must be paid in one go. In that case too, entrepreneurs can reclaim this VAT.
What is the difference between a VAT car and a margin car?
VAT is charged on every new car delivered in the Netherlands. A private individual has to 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 at the time of purchase, this 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 sold on 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 on the part that the car was used privately. If there is a conclusive kilometer registration, the exact amount of the VAT to be paid can be calculated via the calculation tool on the website of the Tax Authorities. If there is no kilometer 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 is purchased or whether a financial lease or operational lease is used. In the case of a margin car, or a car that has been in use by the company for more than 5 years, the fixed amount is 1.5%.