Buying cars from private sellers abroad: VAT and checks
Buying cars from private sellers abroad as a dealer: margin scheme eligibility, purchase documents, safe payment, deregistration and fraud checks.
· 8 min read
Buying cars from private sellers abroad works well for EU dealers: a car bought from a private individual in another member state carries no VAT and can be resold under the margin scheme at home. The work lies in the paperwork – a signed contract, proof the seller is private, registration documents – and in checking ownership, finance and identity before any money moves.
Can a car bought from a foreign private seller go into the margin scheme?
Yes. Article 314(a) of the VAT Directive 2006/112/EC allows the margin scheme when the dealer bought the goods within the Community from a non-taxable person. A private individual in Germany, the Netherlands or Belgium is a non-taxable person, so the car qualifies in your country exactly as if you had bought it from a neighbour.
What does not happen:
- No intra-Community acquisition. A private seller does not make an intra-Community supply, so you do not self-account VAT on the purchase.
- No VAT on the purchase price. You pay the agreed price, and there is no input VAT to reclaim.
- No VAT number check. VIES is irrelevant because the seller has none.
The one exception is a nearly new car. If the car is still a "new means of transport" – supplied within six months of first entry into service or with no more than 6,000 km (Article 2(2)(b)) – even a private seller is treated as making an exempt intra-Community supply, and you must declare acquisition VAT in your country. Such a car cannot be resold under the margin scheme. See new means of transport VAT.
A second trap: a "private" seller who is really a business. A self-employed person who used the car in a VAT-registered business and deducted VAT on it is a taxable person when selling it, and the supply may be taxable or exempt depending on how the car was used. Ask, and get the answer in writing.
What purchase document should a private seller sign?
A written purchase contract is the basis for your margin-scheme records, and tax authorities are strict about it. In two judgments of 11 December 2024 (XI R 9/23 and XI R 15/21), Germany's Federal Finance Court stressed that dealers must be able to document each purchase in full; missing evidence can cost the margin scheme on resale.
The contract should contain at least:
| Item | Why it matters |
|---|---|
| Seller's full name, address and date of birth | Identifies the supplier for margin-scheme records |
| Copy or reference of the seller's ID document | Lets you match the seller to the registration document |
| Make, model, VIN, first registration date, mileage | Ties the contract to one specific car |
| Price, date and method of payment | Purchase price for the margin calculation |
| Declaration that the seller is a private individual and did not deduct VAT on the car | Supports Article 314 eligibility |
| Declaration of no outstanding finance, liens or third-party rights | Shifts the risk to the seller and makes fraud harder |
| Known defects and accident damage | Protects you in later disputes |
| Handover list: registration documents, CoC, keys, service records | Avoids "missing second key" arguments |
Use a contract in a language both sides understand, ideally bilingual. In Germany, standard private-sale forms are widely used and sellers recognise them, which speeds things up.
For car dealers
Know your margin before you buy
MyCarDealer compares any car from an auction or listing with the market in your country and shows the net margin after VAT, transport and costs – and the maximum bid.
Request accessBuying cars from private sellers abroad: checks before you pay
The most expensive mistakes in buying cars from private sellers abroad are not tax mistakes but buying a car the seller cannot legally sell. Run these checks before money changes hands:
- Identity matches ownership. The name on the seller's ID should match the registered keeper or owner on the registration documents. In Germany the Zulassungsbescheinigung Teil II is the key ownership document; a seller without it is a red flag.
- Finance. Cars on finance or lease often have the Teil II held by the bank. Ask directly and check; our car finance check guide explains the options by country.
- VIN. Compare the VIN on the documents with the plate on the car and the windscreen marking. Mismatches or signs of tampering point to VIN cloning.
- Theft and damage history. Use the history and stolen-vehicle checks available for the seller's country.
- Mileage. Compare the odometer with service records, inspection reports and any online history.
- Recalls and inspections. Open recalls and an expired roadworthiness test change your reconditioning budget, not the legality, but price them in.
How do I deregister a car bought from a private seller abroad?
Deregistration depends on the seller's country, and the seller usually has to take part. Agree in the contract who does what, and do not take the car without the documents you need for registration at home.
- Germany: the car is taken off the road (Außerbetriebsetzung) at the registration office, and the plates are cancelled. You then move it on a transporter or on German export plates. See German export plates.
- Netherlands: registration for export is handled through the RDW system, typically by an authorised company; the car then needs export plates or a transporter.
- Belgium: plates belong to the owner, not the car. The seller keeps or returns the plates, so the car normally leaves on a transporter or temporary plates.
- France: the seller must declare the sale online so that liability for fines passes to you.
In every case keep the deregistration confirmation. Your own registration office will usually ask for it together with the foreign registration certificate and, where available, the certificate of conformity.
How do I pay a private seller abroad safely?
Pay by bank transfer at handover, never in advance and never to a third-party account. Since October 2025, payment service providers in the euro area must offer instant credit transfers and check that the payee's name matches the account (Regulation (EU) 2024/886), which lets you pay while standing next to the car and confirm the money has arrived.
Rules that protect you:
- The account holder must be the seller named in the contract and on the registration documents.
- Release the payment only when you have the car, all keys and all documents.
- Avoid large cash payments. Several countries already limit cash in business transactions, and from 10 July 2027 the EU Anti-Money Laundering Regulation (EU) 2024/1624 caps cash payments to traders at €10,000 across the Union.
- Be suspicious of sellers who push for deposits, escrow services you have never heard of or "shipping agents". Our car sale payment scams guide lists the common patterns.
Margin-scheme records in your own country
Once the car is home, your purchase file has to support the margin scheme in your own tax return. Keep together: the purchase contract with the private-seller declaration, proof of payment, the foreign registration and deregistration documents, and the transport documents. Record the purchase price exactly as paid – transport and reconditioning cannot be added to it to reduce the margin.
The margin you will actually make depends on what the car sells for in your market. Before you travel, compare the seller's asking price with current listings at home; MyCarDealer shows the market price and net margin after margin-scheme VAT for any car – try a free valuation.
Frequently asked questions
Can a car bought from a foreign private seller be sold under the margin scheme?
Yes. Article 314 of the VAT Directive covers goods bought within the EU from a non-taxable person, and a private individual in another member state is one. The exception is a car that still counts as a new means of transport, which must be declared as an intra-Community acquisition and sold under normal VAT.
What purchase document should a private seller sign?
A written purchase contract with the seller's identity, the VIN, price and date, a declaration that they are a private individual who did not deduct VAT on the car, and a declaration that the car is free of finance. Attach a copy of their ID and the registration documents.
How do I deregister a car bought from a private seller abroad?
It depends on the country. In Germany the car is deregistered at the registration office, in the Netherlands through the RDW export procedure, and in Belgium the plates go with the owner. Agree in the contract who handles it and keep the confirmation for your own registration.
How do I pay a private seller abroad safely?
Use a bank transfer at handover to an account in the seller's own name, after checking documents and keys. Instant transfers with a payee name check, now standard in the euro area, let you confirm payment on the spot. Avoid cash and advance payments.
Do I need to check the seller's VAT number?
No, a private seller has none. But ask whether the car was used in a business with VAT deducted, because then the seller may be a taxable person and different VAT rules can apply.