VAT change on machinery margins

THE VAT regime for dealers’ second-hand agricultural machinery will change to a margin scheme in January.

First announced in the supplementary budget of April 2009 and confirmed recently by Minister for Finance Brian Lenihan, the new margin scheme will require dealers to account for VAT on their profit margin, that is, on the difference between the cost of acquiring a machine and its selling price.

If there is no margin no VAT liability arises. The scheme will also apply in respect of second-hand cars.