The VAT Margin Scheme in Used Phone Wholesale
Two used iPhones, identical price — one invoice shows VAT, the other does not. Both can be correct. The difference is the margin scheme, an EU VAT mechanism for second-hand goods that shapes pricing across the entire used-device trade.
This is a practical overview for trading professionals. It is not tax advice — your tax advisor owns the final word on your setup.
How the margin scheme works
When a trader buys goods from sources that could not deduct input VAT — private individuals, small businesses, other margin-scheme dealers — VAT applies only to the trader's margin, not the full sale price. In Germany this is §25a UStG; equivalents exist across the EU under the common VAT directive.
Consequence on the invoice: no VAT is shown separately, and the buyer cannot deduct input VAT from a margin-scheme purchase. The invoice carries a reference such as "margin scheme — second-hand goods".
Margin vs. regular invoicing in practice
Stock sourced from businesses with VAT deduction — carrier returns, corporate fleets — typically trades under regular VAT rules, with VAT shown and deductible, or zero-rated as an intra-community supply between EU businesses with valid VAT IDs.
The sourcing channel therefore determines the invoicing type per lot. Mixed streams are normal in this industry; what matters is that each lot is invoiced consistently with its origin.
What B2B buyers should check
Confirm the invoicing type before ordering, because it changes your effective cost: a margin-scheme price and a net-plus-VAT price are not directly comparable if you can deduct input VAT. Exporters should also clarify how the scheme interacts with zero-rated exports in their setup.
We state the invoicing type per lot upfront — margin scheme or regular — so your calculation is right the first time.
Frequently Asked Questions
Why is there no VAT on my invoice?
The lot was sold under the margin scheme: VAT was levied on the dealer margin only and may not be shown separately or deducted. This is regular, lawful practice for second-hand goods.
Which is cheaper for me — margin or regular?
If you can fully deduct input VAT, a regular net price is often effectively cheaper than the same gross margin-scheme price. Compare effective costs, not sticker prices.
Does the margin scheme apply to intra-EU B2B sales?
Margin-scheme sales stay margin-scheme across borders — the intra-community zero-rating does not apply to them. This regularly surprises first-time importers.
Is this tax advice?
No — this page explains market practice for orientation. Structure and edge cases belong with your tax advisor.