What is the net and gross price. How to return European VAT?
Pay for a car less than the price tag: a fairy tale or reality? When buying a car in Europe, you should remember that you can avoid paying VAT twice. How and in what cases it can be done - read in the article.
VAT is a value-added tax that is paid by the buyer or customer at the time of purchase of goods or payment for services.
In each European country, the VAT rates on cars are different: in Poland - 23%, in Germany - 19%, in the Netherlands - 21%, in France - 20%, in Belgium - 21%, in Italy - 22%, in Slovakia - 20, in the Czech Republic - 21%.
When choosing a vehicle on automobile websites, you can see "Gross" prices - this is the price with VAT and "Net" prices - without VAT. If the seller indicates only the "gross" price in the ad, it means that VAT refund is not possible. Some sellers who sell cars at the Netto price may require a deposit in the amount of VAT (sometimes it can be less, it all depends on the seller). VAT can be refunded by both natural and legal persons, if they are not residents of the EU and buy transport for export.
How to return European VAT?
It should be understood that not every car owner can return the European VAT.
If the seller of the car is a natural person, or the car dealer resells the car from a natural person on its site, the cost of transport is only one gross price and VAT is not refunded in this case. Therefore, it is more profitable to buy vehicles that were transported by legal firms - car dealerships - as they are tax payers, and in this case the car will have a net and gross price.
If the buyer is an individual , the process of buying a car and avoiding paying double VAT has certain difficulties:
- Payment . In Ukraine, in the conditions of war, there is no possibility of transferring funds via the SWIFT system. Regarding cash payments in Europe, there are certain limits, for example, in Germany, you can pay for goods and services in the amount of no more than 10,000 euros in cash.
- VAT and customs value . Cars are mostly sold to individuals only at the gross price (net + deposit), and therefore, during customs clearance , the cost of customs payments will be calculated from the full amount of the invoice for the vehicle, including VAT.
Legal entities during export/import can sell and buy goods at the net price, i.e. without value added tax.
According to current legislation and signed international trade agreements, Ukrainian importing firms must also pay for goods on a net basis, as tax payments are made during customs clearance in Ukraine.
However, it is worth knowing that, for example, in Germany, car sellers want to be sure that the car will leave the country, so they require a so-called guarantee payment (car tax, deposit, deposit) in the amount of VAT - in case the buyer does not take the goods out of of Germany and will not close the export declaration at the border.
The solution to the problem, when the seller requires gross payment, and the buyer can make only net payments, is to buy through an intermediary firm within the EU. The intermediary can buy the vehicle gross for his company and, with a certain margin, sell this product at the net price to the Ukrainian legal entity. In this way, the purchase procedure is simplified and it enables the buyer not to freeze his own funds for a deposit, as well as to minimize the risks that an unscrupulous seller may still refuse to return the VAT to him. If you still bought the car for yourself at gross price, here is a checklist of documents that the seller will usually request for the return of the curtain:
1. A signed sales contract, invoice;
2. Confirmation of the closing of the customs declaration (message IE599); 3. Confirmation of export Entry Certificate or Gelangensbestätigung.
3. Signed CMR waybill. 4. A copy of the new technical passport (registration for the buyer).
To avoid many nuances, the West Auto Hub team independently deals with the search, purchase, delivery and customs clearance of cars . You will not have problems with the complexities and subtleties of the import process, because our specialists have many years of experience in this field. To order a car from Europe, call +380 800 212 030.