What Kind of a VAT A Car Dealer Needs to Work With

“VAT can be stated” does not necessarily mean that there is a car dealer behind the advertisement. Every entrepreneur of the size described will show the value added tax, as he could get back the value added tax when buying a car and when reselling it has to charge 20 percent of the net sales price and pay it to the tax office. In turn, every entrepreneur who buys a car for company purposes can claim and receive the value added tax on cars in Germany using the attribute “value added tax can be shown”.

Advantages of “VAT deductible” for private and corporate car buyers

Your advantage through the note “VAT can be shown” when buying privately.

Company car is on a screen

The note “VAT can be stated” initially has no financial impact on private purchases because a used car always costs the final amount. However, “VAT can be stated” is interesting for private buyers when they are looking for commercial offers on the used car market. Because with such, the private car buyer can exercise warranty rights and guarantees within the scope of the purchase contract, which a commercial company offers. The sales tax calculator  is the perfect one in this case for the proper calculation.

In addition, it can be assumed that the vehicle for sale was a vehicle mainly used for company purposes. The motivations for selling such a vehicle are often the advantages that a new company car brings with it. For example, the previous car is sold before any kind of breakdown occurs that could interfere with everyday working life. There is also often the consideration of buying a vehicle that, due to its novelty, represents business success. This means that some of the used company cars are still as good as new.

As an entrepreneur, you have the following financial advantage

VAT is displayed on a screen

Paying VAT when buying a car as a business owner and thus bearing the same costs as when buying a car privately is a financial disadvantage. It makes a difference to offset input tax against sales tax which is paid to the tax office after each sale. For example, an entrepreneur can deduct 19 percent from a car that he buys for the company as input tax deduction when making his next advance VAT return: For example, he pays 11,900 euros for a used vehicle for which the VAT cannot be reported, since a private buyer does not have any VAT collects, he cannot get the input tax back, which is the equivalent of 2,261 euros. This amount would be the advantage for a business when buying a used car with “VAT deductible”. Private offers therefore appear less attractive.

Calculation example

  • Gross vehicle price: 11,900 euros
  • VAT included: (11,900 euros / 119) x 19 = 1,900 euros
  • Net price: 11,900 euros – 1,900 euros = 10,000 euros
  • On the basis of identifiable VAT, a company could buy a vehicle for a gross amount of 11,900 euros including 19 percent VAT for a net amount of 10,000 euros.

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