In most cases, the sale of a used vehicle will be subject to property transfer tax rather than VAT.

Property transfer tax applies to the sale of a company vehicle if, at the time of acquisition:

• property transfer tax was paid, or
• VAT was paid, but the company had no right to deduct that VAT as input tax.

The seller can verify this information in the company’s accounting records.

If property transfer tax was paid when the vehicle was acquired, VAT should not be shown on the invoice upon sale. Instead, the invoice should contain the following note:

Tax exemption note:

The transfer of the motor vehicle in question is subject to property transfer tax in accordance with Article 25, paragraph 2, item 3b) of the VAT Law and Article 23, paragraph 1, item 4a) of the Property Taxes Law.

If VAT was paid upon acquisition, but the company was not entitled to deduct it as input tax, then VAT should also not be shown on the invoice upon sale. In that case, the invoice should include this note:

Tax exemption note:

The transfer of the motor vehicle in question is subject to property transfer tax in accordance with Article 25, paragraph 2, item 3a) of the VAT Law and Article 23, paragraph 1, item 4a) of the Property Taxes Law.

The difference between the two notes is the reference to item 3b) or 3a), so make sure to use the correct one.

Property transfer tax is calculated on the higher of the following two amounts:

1. the purchase price stated in the notarized agreement, or
2. the catalogue value of the vehicle.

If the agreed sale price is higher than the market value shown by the Tax Administration’s calculator, tax will be calculated on the sale price. If the agreed sale price is lower, tax is calculated on the value shown by the calculator.

The tax rate is 2.5%.

The Tax Administration previously used the AMSS catalogue, but that is no longer the case.

Today, the value is checked through the eGovernment calculator available in the Plati application. By entering the data from the vehicle registration certificate, you can see the value used by the calculator and estimate the tax base and the expected tax cost.

When rights over a used motor vehicle are transferred between a legal entity and an individual, or between two legal entities, the taxpayer for property transfer tax is the BUYER.

The tax return for determining property transfer tax on movable property is submitted on form PPI-4.