As a car importer, specializing in imports between European countries outside the EU and EU member states, we import cars daily, as well as other vehicles and moving goods. In some situations, the term ‘VAT reverse charge‘ comes up when importing goods. But what exactly does that mean? Let us explain it to you!
What is VAT reverse charge?
VAT reverse charge is a tax arrangement where the responsibility for calculating and paying value-added tax (VAT) is shifted from the supplier to the buyer of goods or services, commonly applied in cross-border transactions to prevent fraud.
Why do you have to pay the tax in your own country?
You need to pay the tax in your own country because each country has its own rules regarding taxes. When you buy something from another country, they want to make sure they collect the correct tax there, just like your own country does. Therefore, to ensure fairness and that both countries receive what they are entitled to, you pay the tax in your own country when you receive the goods. 
Example of VAT reverse charge and car import
Imagine you buy a new car from someone in another country. Normally, that person would pay the additional tax (VAT) to the tax authorities. However, with VAT reverse charge, you have to pay that tax when you receive the car in your own country.
When is VAT reverse charge beneficial for car imports?
When importing a car via VAT reverse charge, you can save money because the responsibility for paying the VAT is transferred to you as the buyer. This avoids the seller charging and paying VAT in their own country, which could be higher in some cases. By paying the VAT in your own country, you have more control over the tax payment and may be able to apply lower rates, leading to potential savings.
Importing a car with VAT reverse charge?
It is important to understand the specific laws and regulations in your country and seek advice from experts to ensure you apply the scheme correctly and to your benefit.
Do you want to import a car, or another vehicle or moving goods, and are you wondering if VAT reverse charge applies to your situation? Then get in touch with Marlog Europe today. Our import specialists are happy to assist you!
