Example of margin VAT

A refurbisher

• purchases a used device for 100 €,
• refurbishes the device and
• resells it for a tax exclusive price of 150 €.

Example

With margin VAT

With normal VAT

Assuming the VAT rate is 20%, VAT = 150 x 20% = 30 € So, the tax inclusive price, paid by the client, is : 150 € + 30 € = 180 €

The tax inclusive price is 150 €. The seller calculates their own VAT on their margin of 50 €. Assuming that the VAT rate is 20%, VAT rate is 50 - (50 / (1+20%)) = 8,33 € This amount (in our example, 8,33 €)

• is reported by the seller on his own tax declaration,
• but it is not invoiced to the client.

Therefore, when a seller sells a product under the marginal VAT scheme, there is no VAT on the invoice (but there should be a special mention saying the invoice is VAT exempted because of this margin scheme).