According to TASS, the VAT basis will from now on be determined as the difference between the sales price including VAT and the acquisition value. Previously, when purchasing a car from a private individual, the dealer could not sell it to another legal entity at the actual price, as the purchasing company was obliged to pay VAT on the full cost of the car. As noted in the explanatory memorandum to the bill, additional obstacles have arisen for businesses in this segment of used car transactions.

The new mechanism will come into force if the following conditions are simultaneously met: on the date of purchase by the taxpayer of a car or motorcycle, the seller applied the general tax regime, the last owner of the car or motorcycle is a private individual, and purchase a car or motorcycle, the taxpayer has received from the seller an invoice on which the tax amount is determined in accordance with the specifics of taxation.

For consumers – individuals who ultimately buy a car from a dealer – nothing changes for them. In other words, you should not expect a drop in used car prices as a result of the exemption of car dealers from paying the “second” VAT.

According to TASS, the VAT basis will from now on be determined as the difference between the sales price including VAT and the acquisition value. Previously, when purchasing a car from a private individual, the dealer could not sell it to another legal entity at the actual price, as the purchasing company was obliged to pay VAT on the full cost of the car. As noted in the explanatory memorandum to the bill, additional obstacles have arisen for businesses in this segment of used car transactions.

The new mechanism will come into force if the following conditions are simultaneously met: on the date of purchase by the taxpayer of a car or motorcycle, the seller applied the general tax regime, the last owner of the car or motorcycle is a private individual, and purchase a car or motorcycle, the taxpayer has received from the seller an invoice on which the tax amount is determined in accordance with the specifics of taxation.

For consumers – individuals who ultimately buy a car from a dealer – nothing changes for them. In other words, you should not expect a drop in used car prices as a result of the exemption of car dealers from paying the “second” VAT.