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'.....
Someone help!!
Importing a New Means of Transport (NMT) from one EU country to another needs to satisfy three conditions to avoid paying VAT in the new country. These are:
- Over 6 months old
- Completed over 6000 km
- VAT has been paid in the original country on purchase
All three have to be met, 2 out of 3 won’t do! This is EU law on therefore not just restricted to France ie the same would apply to a vehicle from France imported to the UK or, say, from Belgium into Spain etc etc
I hope this helps…
Jon
The AE rules are quite restrictive and if you are buying and selling goods, probably not the best setup. I know you said it was just a sideline, but maybe it is worth chatting to an accountant about it to see if a SARL or EURL will be better. It may give you a way of claiming back TVA in the future.
So yep it looks like I’ve lost all my profit from this machine, luckily all my other bikes have higher mileages…
What a waste of time…
Thanks for all your replies tho.
Steve
And more
TVA rules differ if you do import/export & goods/services business. thresholds are not the same. Info at http://is.gd/cFKnX
I twittered this and the replies were all along the lines of
Go to Douanes services and ask them. TVA rules are very complex
Bonne chance
Sorry to hear about this. I can’t really add anything of value here. However, I did come across this article yesterday which may help others in related queries.
http://www.telegraph.co.uk/finance/personalfinance/offshorefinance/7790677/Buying-a-car-doesnt-have-to-be-taxing.html