Vat Margin

Hi ,

Can you help me with the following question :

I am a VAT registered Irish company dealing with second hand laptop.

If I buy twenty of the same used (refurbished ) laptops Vat free from Sweden.

So minus 25% vat (as is the vat rate in Sweden).

Can i sell them in Ireland with VAT margin ?

or

Can i sell them with both standard Vat and Vat Margin depending on customer.

or

Do i have to charge 23% full vat across the board.



Thank you

If you're buying them VAT free how/where does VAT margin come into this at all given that it's designed to deal with VAT double taxation and there isn't even single taxation on your acquisition of the goods?
What does your accountant/tax advisor say?

Thank you for your reply,
Vat free might be the wrong terminology, thank you for the revenue link i did see that, as a vat registered company i can buy products in other eu countries minus that countries Vat rate (hence i used the term Vat free ) . But when i sell that product in Ireland i charge 23% vat, that is the standard ...... but because i sell a product that is not new i can opt to sell via VAT Margin .... But there are rules around Vat Margin which i have discussed at length with other people in my field and i get conflicting results ... my accountant is away till the end of Aug,
I though i might drop a question in here to see if there was anybody who could point me in the right direction.

Thank You

I'm going to preface what follows by saying VAT is not my favourite tax head, so I'm entirely open to correction on what follows!:

If they are Zero rated supplies (as opposed to margin scheme goods) in the country of origin then you are required to account for Irish VAT on them (ie. 23%) and entitled to a deduction for that VAT, provided you charge VAT on your onward sale of the goods.

If you elect for the Margin Scheme on the laptops you would still be required to pay over the VAT on the intercommunity acquisition (ie. the Irish VAT on buying them in from Sweden), but you wouldn't be entitled to any deduction for that VAT - in other words that VAT would be a cost to you, a laptop that you paid €100 for in Sweden, will have cost you €123 if you opt for the Margin Scheme.

You would then account for VAT on your margin when you sell them on, but in order to make a cash profit, you'd have to sell for more than €123...

It actually gets worse, as I believe there is EU VAT case law (https://www.kmlz.de/en/VAT/Newsletter_35_2023) that says that the €23 of VAT borne is disregarded for the purpose of calculating the margin, so for margin scheme purposes you would have a cost base of €100 (even though you've suffered €23 of VAT already). This effectively pushes the break even point up by another €5.

So it seems you would be worse off applying the margin scheme to goods purchased as Zero rated ICA's.