VAT on car exports outside the EU: zero-rating proof
VAT on car exports outside the EU explained: zero-rated export, customs export declaration, proof of exit and how margin-scheme cars are treated.
· 6 min read
VAT on car exports outside the EU is zero: under Article 146 of the VAT Directive, a car dispatched or transported to a destination outside the EU is exempt, whether the seller or a non-EU buyer arranges transport. The exemption depends on proof of exit, normally the customs export declaration with an electronic exit confirmation. Margin-scheme cars can also be exported VAT-free; the buyer pays import taxes at destination.
VAT on car exports: is VAT charged when a car leaves the EU?
No, as long as the car really leaves the EU and you can prove it. Article 146(1) of the VAT Directive 2006/112/EC exempts:
- (a) the supply of goods dispatched or transported outside the EU by or on behalf of the vendor, and
- (b) the supply of goods dispatched or transported outside the EU by or on behalf of a customer not established in the seller's member state.
The UK calls this zero-rating; continental countries call it a tax-exempt export ("steuerfreie Ausfuhrlieferung" in Germany, "exportation exonérée" in France). The effect is the same: no VAT on the sale, and the seller keeps the right to deduct input VAT on related costs.
Typical destinations for European dealers are Switzerland, Norway, the UK, the Western Balkans, Ukraine, Georgia and markets in Africa and the Middle East. The buyer then deals with import VAT, customs duty and any registration tax in his own country, for example in Switzerland or Norway.
Which document proves that a car has left the EU?
The key proof is the electronic exit confirmation from customs. Every export of a car above the low-value thresholds needs an export declaration, which receives a Movement Reference Number (MRN). When the car passes the EU's external border, the customs office of exit confirms the exit electronically, and the customs office of export issues the confirmation to the exporter.
In Germany this document is the "Ausgangsvermerk" produced by the ATLAS export system. German VAT guidance accepts it as export evidence regardless of whether the seller or the buyer transports the car. Other member states use the same EU export control system with national names for the confirmation.
Keep alongside it:
- the sales invoice with the VIN and a reference to the export exemption;
- the export declaration with MRN;
- transport documents, such as a CMR or the ferry or shipping booking;
- payment evidence;
- for cars driven out on export plates, a copy of the export registration.
A stamp or a buyer's word is not enough if the exit was never recorded electronically. Check the status of the MRN before you refund any VAT deposit.
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 accessWho transports the car: seller, carrier or buyer
The exemption covers all three cases, but the risk rises as control moves from you to the buyer.
| Transport | VAT condition | Practical risk |
|---|---|---|
| Your own carrier delivers abroad | Art. 146(1)(a) | Low: you control the documents |
| Carrier booked by the buyer | Art. 146(1)(b), buyer not established in your country | Medium: you depend on the buyer's paperwork |
| Buyer drives the car out | Art. 146(1)(b) | Highest: the car may never leave |
When a non-EU buyer collects and drives the car out, most dealers invoice with domestic VAT or take a deposit equal to the VAT and refund it only once the electronic exit confirmation arrives. In Germany, cars leaving under their own power typically use export plates; see German export plates.
A buyer who is established in your own country, for example a domestic trader exporting the car himself, does not fall under Article 146(1)(b). In that case he exports, and you sell domestically with VAT.
How is a margin-scheme car treated when exported?
A margin-scheme car can be exported VAT-free in the same way. The Directive excludes margin goods from the intra-community exemption (Article 139(3)) but not from the export exemption. Germany states this directly: under § 25a(5) UStG the general exemptions remain available under the margin scheme, except the exemption for intra-community supplies.
The practical consequences:
- you invoice the car with the export exemption reference and the margin mention;
- no VAT is due on your margin;
- you cannot reclaim any VAT on the purchase price, because a margin car carries none that is deductible;
- your input VAT on repairs, transport and fees remains deductible.
For a German dealer selling a margin car for €14,000 bought at €11,000, the domestic margin VAT would be €3,000 × 19/119 = €479. As an export with proof of exit, that €479 stays in the margin.
VAT-qualifying cars on export
A VAT-qualifying car, such as an ex-lease car bought with VAT, is exported net, and the VAT you deducted on purchase stays deducted. That makes exporters natural buyers of net cars: they compare net purchase price with net export price, with no VAT in between. Our guide to VAT qualifying cars explains how to compare net and margin stock.
Can a non-EU buyer reclaim VAT paid on a car?
Only through the seller. A non-EU buyer has no VAT return in the EU in which to reclaim the VAT. If he paid the car gross, the seller can treat the sale as an export and refund the VAT once valid proof of exit exists, provided the conditions of Article 146(1)(b) are met under national rules.
The tourist refund scheme in Article 147 is designed for goods carried in travellers' personal luggage and is not the route for cars. In practice the sequence is: invoice gross or take a deposit, wait for the electronic exit confirmation, then refund and issue a corrected export invoice.
Export checklist for dealers
- Confirm the buyer's identity and that he is not established in your country.
- Agree in the contract who handles the export declaration and transport.
- Take a VAT deposit if the buyer collects.
- File the export declaration or check that the buyer's agent filed it with your details as exporter.
- Wait for the electronic exit confirmation.
- Issue or correct the invoice with the export exemption reference.
- Refund the deposit and archive the file.
MyCarDealer shows what a car is worth in your own country and the margin after VAT, so you can compare a domestic sale with an export offer; try it with the free valuation.
Frequently asked questions
Is VAT charged when a car is exported outside the EU?
No. Article 146 of the VAT Directive exempts the supply of a car transported outside the EU by the seller or by a non-established buyer. The seller must keep proof of exit, normally the electronic customs exit confirmation.
Which document proves that a car has left the EU?
The customs export declaration with its MRN and the electronic exit confirmation issued when the car crossed the EU border. In Germany this is the Ausgangsvermerk from the ATLAS system. Keep transport documents and the invoice with it.
How is a margin-scheme car treated when exported?
It can be exported VAT-free, so no VAT is due on the dealer's margin. Margin goods are excluded only from the intra-community exemption, not from the export exemption.
Can a non-EU buyer reclaim VAT paid on a car?
Not from the tax office directly. The seller can refund the VAT once the export is proven, where national rules allow. That is why many dealers take a VAT deposit from buyers who collect and refund it after the exit confirmation.
Is a sale to a UK buyer an export?
Yes, for cars leaving the EU for Great Britain. Northern Ireland is different, because it follows EU VAT rules for goods, so sales to NI follow intra-EU rules.