Buying a car in Germany: net, gross and VAT

This article is dated as shown. Laws, fees and prices have changed since then. Check the figures before you rely on them.

In this article we look at what VAT is and at what price a car is bought in Germany.

At the standard rate of 19%, the gross price equals the net price multiplied by 1,19. The VAT share of the gross price is not 19% of the gross price. Check the specific tax regime and the tax amount on the invoice.

So what price will you pay if you buy a car in Germany?

The payment procedure and any possible refund are agreed with the seller before the transaction. There is no general rule that all buyers always pay a VAT deposit and then get it back.

Buyers from the European Union

When a car is moved between EU countries, no customs duty is charged. VAT and national registration taxes are checked separately. For VAT purposes a car counts as new if it has no more than 6,000 km on the clock or is delivered within six months of its first registration. For a used car, both opposite conditions must be met. These guidelines apply to a private buyer; a purchase on behalf of a company is assessed separately.

Buyers outside the EU

Buying from a dealer does not in itself guarantee a VAT refund. What matters is the tax regime on the invoice, the delivery terms and proof of export. Before paying, agree with the seller the final amount, the documents and the procedure for any possible refund. Under the margin scheme you cannot count on a refund of a separately shown 19% of the full price.

A single price in an advert does not prove that there is no VAT. You need to examine the tax regime and the invoice details, including whether the margin scheme applies.

Here is a short but informative video that Destacar has prepared for you.