VAT refund on cars purchased in Europe: practical recommendations for Ukrainians
If you find a bargain car in Europe but discover, when completing the paperwork, that the price already includes VAT, don’t despair. You can get a refund of this tax, but knowing a few key aspects is essential.
What is a net and gross price?
To get a VAT refund, the invoice must indicate both prices: net and gross. If only gross is shown, you cannot get a VAT refund.
Who is entitled to a VAT refund?
Non-EU buyers, that is, citizens or companies from Ukraine, can get a VAT refund, provided that the seller is a VAT payer in their country (often, these are car dealerships or large enterprises).
Who is easier to get a VAT refund from: an individual or a company?
It may be more difficult for individuals to get a VAT refund due to:
Limitations on cash (for example, in Germany, it is no more than 10,000 euros).
Problems with transfers via SWIFT from Ukraine.
Higher customs clearance costs due to VAT.
For legal entities, the situation is much more favorable:
The vehicle is paid at the price excluding VAT (net).
VAT can be refunded after customs clearance in Ukraine.
Documents for refund are easier to prepare and are received faster.
Guarantee payment
In several countries, including Germany, companies can pay VAT as a deposit. This payment will be refunded only after the car is exported from the EU. Therefore, many Ukrainian companies choose to work through intermediaries to avoid risks.
What documents are needed for a VAT refund?
Invoice and sales agreement.
Document confirming customs clearance – C599.
Export document – Entry Certificate.
International consignment note (CMR).
A copy of the technical passport is in the name of the buyer.
Prepare in advance to save money and collect VAT. Choose a reliable seller and clarify the terms of tax refund before buying a car.
As a reminder, it is essential to know about taxes such as 5%, 18%, and military duty to avoid troubles when selling a car.
