2025: margin scheme restricted for art, collectors' items and antiques

Resellers holding the relevant licence can currently apply the margin scheme to goods bought, acquired or imported at the reduced rate. That comes to an end in 2025.

Until 2025: the margin scheme on purchased, acquired and imported items

The margin scheme in principle applies only to goods bought without VAT, for example because the seller is a private individual or another reseller within the meaning of the scheme.

It may, however, also be applied to the resale of works of art, antiques and collectors' items where the supply to the reseller, or the intra-Community acquisition or importation by the reseller, was taxed at the reduced rate. The reseller must hold a licence for this, which can be applied for from the inspector in advance.

Where the reseller opts for the margin scheme in those cases, it cannot deduct the 9% VAT charged to it or that became due on importation or acquisition.

Example. In 2024 a reseller imports a classic car from the United States. The car qualifies as a collectors' item (CN code 9705). Import VAT of 9% is due. Because the reseller holds the licence, it may apply the margin scheme on resale. The import VAT is not deductible and 21% VAT is due on the profit margin.

From 2025: no margin scheme for these goods

At EU level it was found that applying the margin scheme to art, collectors' items and antiques bought, acquired or imported at the reduced rate distorts competition. It is attractive for resellers to resell such goods from member states with lower VAT rates.

To remove that advantage, the scheme is restricted from 1 January 2025. From that date the reseller may no longer apply the margin scheme on resale where the purchase, acquisition or importation was taxed at the reduced rate.

Example. The same reseller imports another classic car from the United States in 2025, again a collectors' item. Import VAT of 9% is due. Because the importation is taxed at 9%, the margin scheme does not apply on resale. The reseller must therefore pay 21% VAT on the full selling price and may deduct the import VAT.

Transitional rule

Where the reseller bought, acquired intra-Community or imported such goods at the reduced rate before 1 January 2025 and did not deduct that VAT, it may deduct it in the return for the first period of 2025.