The Duma changes the tax rules for the resale of cars
- October 25, 2023
- 0
The State Duma has adopted in its first reading a bill to abolish double VAT on the resale of used cars and motorcycles between dealers. This should make
The State Duma has adopted in its first reading a bill to abolish double VAT on the resale of used cars and motorcycles between dealers. This should make retailers’ operations even more profitable.
As TASS reports with reference to the text of the bill, when buying a car from an individual, the dealer cannot take it and resell it to another legal entity, even for the same price. The second car dealer will have to pay VAT on the full cost of the car, and the deduction can only be claimed on the difference between the price of purchase and sale by the first showroom. According to the senators who developed the amendments, this creates “additional obstacles” to secondary market transactions.
As a result, it becomes unprofitable for dealers to sell used cars “due to the lack of economic feasibility” or to resort to various “grey” schemes, for example with an individual as an intermediary. The bill proposes to abolish the double collection of VAT, which should protect car dealers from unnecessary costs. The government supported this idea, but asked to “identify sources of compensation for lost federal budget revenues if the relevant federal law is passed and implemented.”
As TASS reports with reference to the text of the bill, when buying a car from an individual, the dealer cannot take it and resell it to another legal entity, even for the same price. The second car dealer will have to pay VAT on the full cost of the car, and the deduction can only be claimed on the difference between the price of purchase and sale by the first showroom. According to the senators who developed the amendments, this creates “additional obstacles” to secondary market transactions.
As a result, it becomes unprofitable for dealers to sell used cars “due to the lack of economic feasibility” or to resort to various “grey” schemes, for example with an individual as an intermediary. The bill proposes to abolish the double collection of VAT, which should protect car dealers from unnecessary costs. The government supported this idea, but asked to “identify sources of compensation for lost federal budget revenues if the relevant federal law is passed and implemented.”
Source: Avto Vzglyad
Donald Salinas is an experienced automobile journalist and writer for Div Bracket. He brings his readers the latest news and developments from the world of automobiles, offering a unique and knowledgeable perspective on the latest trends and innovations in the automotive industry.
