Vat On Selling A Registered Vehicle

[Sifaan]

Hi!

To my understanding, VAT on motor vehicles only apply to unregistered vehicles. Can some one please confirm?

Scenario is as follows:

Unregistered Vehicle was purchased by a company; part of the VAT payment was claimed as input VAT (I think it was 50% of 12%; even though 20% VAT is charged you can not claim 20% as input VAT; even claiming 12% is if it is 100% commercial use or somesuch).

After some years, company sells vehicle.

As a VAT registered company, should they charge VAT? Or is it that registered cars are exempt from VAT?

I think none of these car sales could operate if VAT applied for sale of registered vehicles (they can't ALL be committing VAT fraud!!) but would appreciate confirmation because the auditors are saying VAT should be deducted :S

Thanks!

[hakjay]

To my knowledge if the vehical is registered under company name then VAT should be charged. When registered vehiclas are sold from a car sale and the guy gives you an invoice the he will hjave to mention the vat amount else it will be fraud. In most cases when registered vehicals are sold from car sales the recipt given is just paper. Any way it will be interesting to know from an expert

[MkX]

To my understanding, VAT on motor vehicles only apply to unregistered vehicles. Can some one please confirm?

Unregistered Vehicle was purchased by a company; part of the VAT payment was claimed as input VAT. After some years, company sells vehicle.

As a VAT registered company, should they charge VAT? Or is it that registered cars are exempt from VAT?

I think none of these car sales could operate if VAT applied for sale of registered vehicles (they can't ALL be committing VAT fraud!!) but would appreciate confirmation because the auditors are saying VAT should be deducted :S

Confusion .. Are you talking about a Company that buy unreg vehicle for their usage .. register it and resell after some time back or else are you talking about vehical importers, or car sales. These are 3 different scenarios.

In general if you are a VAT registered company/person you can or (any comments pls) have to add vat to goods and services you offer.

[Sifaan]

Confusion .. Are you talking about a Company that buy unreg vehicle for their usage .. register it and resell after some time back or else are you talking about vehical importers, or car sales. These are 3 different scenarios.

sorry for the ambiguity; it was purchased by company for company use (at least, officially.. practically speaking it was also used by the owner for personal use)

the company is not in the business of buying/selling vehicles (so the car was treated as a "fixed asset", not as "goods in stock")

In general if you are a VAT registered company/person you can or (any comments pls) have to add vat to goods and services you offer.

unfortunately (or fortunately?) it's not quite as simple as that... e.g. if you are an exporter you will not be charging VAT (but you should get VAT registered and then you can claim your input VAT); and there are some items that VAT doesn't apply on at all.. e.g. there is no VAT on computers.

so even if a company is VAT registered (because they sell some goods/services that are liable for VAT) it doesn't mean that VAT applies to everything

[Sifaan]

bump... even if you haven't personally experienced this, if you are driving a company owned (not just rented) vehicle then it's likely your finance people have some info on this topic... if you can check with them and share your experience it would be much appreciated.

thanks