The margin scheme on resale value is an important topic for auto repair shops, especially when dealing with used cars. It offers tax advantages but can also be complex. This guide explains everything you need to know, from the definition to practical application.
What is the Resale Value Margin Scheme?
The margin scheme according to § 25a UStG (German VAT Act) allows auto repair shops to tax only the difference between the selling price and the purchase price when selling used cars, instead of the entire selling price. This can lead to significant tax savings. Imagine you buy a used car for €5,000 and sell it for €7,000. With standard taxation, you would have to pay 19% VAT on €7,000. With the margin scheme, you only pay 19% on the difference of €2,000.
Prerequisites for the Margin Scheme
Not every used car sale qualifies for the margin scheme. There are certain prerequisites that must be met:
- The car must have been purchased from a seller who did not show VAT (e.g., a private individual).
- The car must not be new.
- The purchase contract must contain a reference to the margin scheme.
Advantages of the Resale Value Margin Scheme
The margin scheme offers clear advantages for auto repair shops:
- Lower Tax Burden: As mentioned, only the margin is taxed, which leads to lower tax payments.
- Competitive Advantage: Due to the lower tax burden, workshops can make their prices more competitive.
- Simplified Accounting: Calculating VAT is simpler than with standard taxation.
Benefits of the margin scheme in the automotive sector
Practical Application of the Margin Scheme
The practical application of the margin scheme requires care and accuracy. Here are some important points to consider:
- Correct Invoicing: The invoice must contain the note “Margin scheme according to § 25a UStG”.
- Complete Documentation: All relevant documents, such as purchase contracts and invoices, must be carefully kept.
“Precise documentation is the be-all and end-all of the margin scheme,” says Dr. Karl Heinz Müller, a renowned tax advisor and author of the book “Tax Optimization for Automotive Businesses.”
Frequently Asked Questions about the Resale Value Margin Scheme
- Can I also apply the margin scheme to spare parts? No, the margin scheme only applies to the sale of used cars.
- What happens if I do not meet the requirements for the margin scheme? In this case, standard taxation must be applied.
Further Information
Visit our website autorepairaid.com for more information on topics related to car repair and diagnostics. We also offer a wide range of diagnostic tools and textbooks for further education.
Key tips for resale value margin scheme
Conclusion
The resale value margin scheme is a complex but worthwhile topic for auto repair shops. With this guide, you have gained a good overview of the most important aspects. If you have further questions, our car experts are at your disposal. Contact us via our website – we are there for you 24/7!
