Margin VAT: how it is calculated on a used phone
On a used device bought from a private individual, VAT only applies to the margin. The rule, an example, and what Fixara does.
When a VAT-registered shop resells a used item bought without VAT (from a private individual, for example), it can apply the margin scheme (article 297 A of the French tax code): VAT is not calculated on the sale price, but on the difference between the sale price and the purchase price.
An example
- Phone bought back for €100 from a private individual.
- Resold for €220. The margin is €120, VAT included.
- VAT due at 20%: 120 × 20 / 120 = €20.
On the invoice, VAT is not shown line by line: the invoice states the margin scheme. In Fixara, a device that comes from a buyback is under this scheme by default: see margin VAT in Fixara.
Check with your accountant
This summary is not tax advice: special cases (purchase from a business, negative margin, VAT exemption) should be reviewed with your accountant.