This article is prepared specially for customers from Europe. In other countries, there is no Marginal VAT. They have other concern points.
Q: What is Marginal VAT?
A: VAT Margin schemes tax the difference between that you paid for an item and what you sold it for, rather than the full selling price. Compare with other VAT Rate, Marginal VAT is calculated at a lower rate 16.67%.
Q: When Marginal VAT can be effective?
If you are a VAT-registered business that sells any kind of pre-owned goods, such as used cars, used phones used furniture and so on, you can calculate VAT in this way Marginal VAT.
Used mobile phones is second-hand goods listed for Marginal VAT.
Q: Does every country has Marginal VAT?
A: No. Different country has their own tax schemes. In mobile phone industry, the famous Marginal VAT people asking every day is the one existing in EU countries. This is the important point the EU buyers care very much.
Q: Is all used phones in EU country can use Marginal VAT?
A: NO. In EU countries, if you want the phones to be suitable for Marginal VAT, you should meet 3 conditons together. First, the phones are EU spec. Second, the phones are bought from EU countries. Thirdly, the phones are slold to EU countries.
Q: If not Marginal VAT, which VAT should we pay?
A: In EU, if the phones is not suitable for Marginal VAT, it will be taxed at Standard VAT. Whatever the selling price is, the Standard VAT is added on the top at a fixed standard rate. Different EU country has its fixed rate. It is roughly 20%~22%. This is the most common rate the people in EU face in their daily life.
These are some common questions we face every day when dealing with EU customers. If you have more question, please feel free to contact our experts.