Resale of used cars and motorcycles in Russia to be subject to VAT on price difference throughout dealer chain

• Resale of used cars and motorcycles in Russia will be subject to VAT on the price difference throughout the dealer chain.
• The current tax law applies a special taxation method for the sale of vehicles purchased for resale from individuals.
• The tax base is determined as the difference between the market price of the vehicle including VAT and the purchase price.
• However, if a dealer buys a car from an individual, they cannot sell it to another legal entity at the actual price.
• The second legal entity must pay VAT on the full value of the car, and can only claim a VAT deduction on the difference between the purchase and sale prices by the first legal entity (dealer).
• A proposed law aims to extend this taxation method to the entire chain of used car and motorcycle resellers.
• The tax base for subsequent sales of vehicles purchased by taxpayers from sellers who determined the VAT base according to the specified rules will be determined as the difference between the sale price, determined in accordance with the tax code, and the purchase price including tax.

Source: garant.ru

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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