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VAT on the « profit margin scheme » for second-hand vehicles

The tax administration waives the right to appeal a judgment in favour of the taxpayer obtained by Frenkel & Associés from the Administrative Court of Besançon (21 May 2019, Nos. 1600456 and 1702138) in a case in which the tax inspectorate claimed that a motor vehicle dealership could not have been unaware that he had participated in a margin VAT fraud scheme when selling second-hand vehicles from various European countries. In a difficult case-law context, Frenkel & Associés had stressed in particular the impossibility of deducing the applicable VAT system from the information on registration certificates which could not prejudge the VAT system applied in the country of origin, as well as the need for the administration to use international administrative assistance to identify such fraud, a possibility which the taxpayer obviously does not have.

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