VAT on Used iPhones: Margin Scheme vs. Standard VAT, Explained
Two invoices for the same used iPhone lot can carry very different VAT treatment — and it is not a rounding detail. Which scheme applies changes what you can reclaim, how you price resale, and what your own invoice to your customer needs to say.
This is a general explainer of how the EU's margin scheme for second-hand goods works. It is not tax advice for your specific business — always confirm the applicable treatment with your tax advisor and with the invoicing type your supplier states for a given order.
By TR Admin · Last updated: 2026-07-09
Standard VAT vs. margin scheme, in short
Under standard VAT, a seller charges VAT on the full sale price, and a VAT-registered buyer can generally reclaim it. Under the EU margin scheme for second-hand goods (implemented in Germany as differenzbesteuerung, §25a UStG), a dealer who bought a used item without deductible input VAT — typically from a private seller or another margin-scheme dealer — charges VAT only on their margin, not the full price, and that VAT is not separately reclaimable by the buyer.
Neither scheme is "better" in the abstract. Which one applies depends on how the specific unit was sourced, not on the supplier's general business model — a single wholesale lot can legitimately mix both.
Why it changes your resale math
If you buy under the margin scheme, you cannot reclaim input VAT on that unit, but you can typically apply the margin scheme again on your own resale — meaning you only pay VAT on your resale margin, not the full price a second time. Buy the same unit under standard VAT, and the VAT treatment on your side works differently: you can usually reclaim the input VAT, but your resale is then taxed on the full price, not just your markup.
For B2B buyers building out a margin model across hundreds or thousands of units, this is not a footnote — it is the difference between profitable and unprofitable pricing on paper-thin wholesale margins.
What to check on the invoice
A correctly issued margin-scheme invoice in Germany states the wording "Gebrauchtgegenstände/Sonderregelung" (or the equivalent for the applicable category) and shows no separate VAT line — because the buyer cannot deduct it either way, showing one would be misleading. A standard-VAT invoice shows VAT broken out separately at the applicable rate.
Ask any supplier which invoicing type applies before you commit to a lot, not after — it is a normal, expected question in this trade, not a red flag to raise it.
Frequently Asked Questions
Can the same supplier issue both types of invoice?
Yes. The scheme depends on how a specific unit was sourced, so a supplier trading in bulk mixed-origin stock can legitimately issue margin-scheme invoices for some units and standard VAT for others within the same shipment.
Does the margin scheme apply to exports outside the EU?
Export VAT treatment follows separate rules from the margin scheme and generally involves zero-rating with export documentation rather than margin-scheme invoicing — ask your supplier how a specific export order will be invoiced.
Is margin-scheme VAT the same as "tax-free"?
No. VAT is still charged, just calculated only on the dealer's margin rather than the full sale price, and it is not shown as a separately reclaimable line on the invoice.
Who decides which scheme applies — the buyer or the seller?
The seller determines it, based on how they themselves acquired the goods and their own VAT registration status — it is not a preference the buyer can select at checkout.