New means of transport

What it means

New means of transport are cars, motorcycles, boats and aircraft that the VAT Act treats as new. For motor vehicles this means those supplied within six months of first being put into service or with no more than 6,000 kilometres on the clock.

For boats, the criteria are a length over 7.5 metres and use of up to three months or 100 sailing hours; for aircraft, a weight over 1,550 kilograms and use of up to three months or 40 flying hours. Other vehicles are second-hand for VAT purposes and are sold under the normal rules.

The special feature is that when such a vehicle is sold to another member state, VAT is due in the buyer's country even if the buyer is a private individual who is not a VAT payer. The aim is for new vehicles to be taxed where they will be used and to prevent price differences between countries.

How it works in practice

A Slovak seller who sells a new car to a buyer in another EU country applies the exemption as for an intra-EU supply, provided it can prove the vehicle was transported to the other country. When selling to a VAT payer, it also reports the sale in the EC sales list.

A buyer who brings a new car from another EU country into Slovakia must pay Slovak VAT as on an intra-EU acquisition of goods. A private individual files a tax return and pays the tax before registering the vehicle, which the vehicle registration authority makes conditional on proof of payment.

For second-hand vehicles, the margin scheme usually applies if the seller is a dealer in used goods. The distinction between new and used is therefore crucial for the price and should be checked against the date of first registration and the odometer reading.

What to watch out for

Even a person who is not a VAT payer becomes a taxable person for that transaction when selling a new means of transport to another member state, and can claim a refund of VAT paid on purchase, up to the amount of tax that would be due on a domestic sale.

Audits focus mainly on transport documents and mileage data. Odometer tampering or false information about the date of first use can lead to incorrect taxation and additional assessments. When trading in vehicles, careful archiving of documents is essential.