TVA (VAT) on used vehicles.
I run a very small sideline buisiness as an Auto-entreprenur from our house selling used motorcycles imported from the UK www.psycomoto.com
A particular bike I picked up in the UK had just 4000km on the clock and was two years old, thinking it was an ok deal I imported it with the usual hassels (more than usual in fact) three days ago I recieved a recorded letter telling my I owe the french tax office the VAT (TVA) on this particular bike as in french law it is classed as a 'new machine' (as it had under 6000km on the clock)????! I would have ridden it around abit in the UK had I of known!
So they have sent me an invoice for 19.6% of the original purchase value, plus a fine to the value of 40% of the unpaid TVA on top. Basically they are asking me for €1600 (which is more than my profit margin) to settle up.
Are they allowed to do this as the bike had VAT paid on it in March 2008 in the UK when it was new?
The french law indicates that any vehicle under 6 months old or with less than 6000km is treated as a 'New vehicle'.....