Fiscora

Businesses that buy and resell second-hand goods, works of art, collectors’ items or antiques may, under certain conditions, apply the VAT margin scheme. It’s a derogatory scheme that avoids double taxation, but its conditions of application are strictly defined.

The principle of the margin scheme

Unlike the standard scheme, where VAT is calculated on the total sale price, the margin scheme allows VAT to be calculated solely on the margin realised by the reseller, i.e. the difference between the sale price and the purchase price of the item. The aim is to prevent a good already “taxed” in a prior sale between private individuals from bearing new VAT on its full value when resold by a professional.

Who can apply this scheme: taxable-dealer status

The margin scheme is reserved for taxable dealers, meaning professionals whose business consists of buying, or allocating for their business needs with a view to resale, second-hand goods, works of art, collectors’ items or antiques. It applies where the good was acquired from a non-taxable person (a private individual), or from a taxable person who was unable to deduct VAT on that good.

Actual margin or global flat-rate margin

• Actual margin: calculated item by item, based on the actual purchase and sale price of each good.
• Global flat-rate margin: calculated over a given period, when the purchase price of each item cannot be determined individually (lots, bulk purchases).
• Specific invoicing rules apply: VAT on the margin must not be shown separately on the invoice issued to the customer.

Fiscora’s support

We help professionals in the second-hand, art and collectors’ market secure the application of the margin scheme, maintain their goods-based accounting records, and ensure their invoicing is compliant.