VAT – Margin scheme: Goods that have never been used may still qualify as second-hand goods
Published on :
02/09/2026
02
September
Sep
09
2026
On 19 August, the French tax authorities published a tax ruling (BOI-RES-TVA-000270) providing useful clarification on the definition of second-hand goods for the purposes of the VAT margin scheme.
As a reminder, this scheme allows a taxable dealer purchasing second-hand goods, works of art, collectors’ items or antiques from persons who are not liable for VAT (in particular private individuals) to account for VAT only on the profit margin, rather than on the full resale price.
Under French domestic law, second-hand goods are defined as tangible movable property that is “suitable for further use as it is or after repair”, excluding, in particular, works of art, collectors’ items and antiques, as well as precious metals and precious stones.
Relying on the case law of the Court of Justice of the European Union (CJEU, 18 January 2017, Case C-471/15, Sjelle Autogenbrug), the French tax authorities point out that classification as second-hand goods does not require the goods to have actually been used. It is sufficient that they have retained the functionalities they possessed when new and that they can be reused as they are or after repair.
The ruling therefore specifies that goods purchased by a taxable dealer from a private individual who definitively bore the VAT upon their initial purchase qualify as second-hand goods, irrespective of whether or not that individual actually used them. The fact that the goods have remained in their original packaging and have never been used is irrelevant, provided that they remain fit for use.
The French tax authorities illustrate this position with two examples: the resale by a taxable dealer of a new pair of shoes that has never been worn and is sold by a private individual, and the resale of bottles of wine purchased and subsequently sold by a private individual in their original condition. Both transactions may benefit from the VAT margin scheme.
This clarification confirms the underlying purpose of the scheme: to prevent double taxation of VAT where the price paid by the taxable dealer to a non-taxable person already includes VAT that has been definitively borne and has been deducted neither by the original seller nor by the dealer.
History
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VAT – Margin scheme: Goods that have never been used may still qualify as second-hand goods
Published on : 02/09/2026 02 September Sep 09 2026Firm News
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