How to declare the sale and purchase of used vehicles in your dealership

What tax obligations does a dealership that sells used cars have?

If you manage a used car dealership in Spain, you know that paperwork and tax obligations are part of the daily routine. And although it may seem complicated, the truth is that correctly declaring the buying and selling of vehicles doesn't have to be difficult if you understand the key points well.

The goal is not only to comply with the tax authority but also to avoid penalties, save time, and keep accounts clear.

What taxes affect the buying and selling of used cars

VAT or Transfer Tax (ITP)

The key here lies in who the seller is and what tax regime the dealership is under:

• If a dealership sells to a private individual, VAT usually applies, unless it uses the Special Regime for Used Goods (REBU).

• If a private individual sells a car to another private individual, the ITP applies, which is paid by the buyer.

• In sales between companies, VAT is applied at the general rate (21%).

Special Regime for Used Goods (REBU)

This is very common in dealerships that sell used cars. Why? Because it allows taxation only on the profit margin, not on the total sale price.

For example: you buy a car for €8,000 and sell it for €10,000. Instead of applying VAT to the total (€10,000), it only applies to the margin (€2,000).

This has several tax advantages, but it also involves specific accounting obligations, such as keeping a detailed purchase ledger.

How to correctly invoice a sale of a used vehicle

Invoicing correctly is not only mandatory; it is also essential to declare accurately. Depending on whether you are under the general regime or REBU, the invoice must include different elements.

If you are under REBU:

• VAT is not itemized (it is considered included in the final price).

• The mention must include: “Operation under the Special Regime for Used Goods. VAT included in accordance with Article 135 of Law 37/1992.”

If you are under the general regime:

• The taxable base, VAT rate (normally 21%), and corresponding amount must be clearly broken down.

Additionally, it is important to keep the following documents:

• Copy of the purchase agreement

• Purchase invoice (if the car was acquired from another professional)

• Technical data sheet of the vehicle

• Proof of payment and collection

And what about form 347? When do I have to submit it?

Form 347 is an annual informative declaration, which includes operations with third parties that exceed €3,005.06 in the natural year.

What is included?

• Purchases of cars from professionals

• Sales to companies or freelancers that exceed that amount

• Sales to private individuals are not included

It is submitted each year in February and does not imply tax payment, but it is mandatory to maintain tax transparency.

Tax differences based on client type

Sales to private individuals

• Applies VAT (REBU or general regime)

• No invoice detailing VAT is provided if you are in REBU

Sales to companies/freelancers

• An invoice must always be issued with all details

• Normally the general regime applies (with itemized VAT)

• These operations must appear in form 347 (if they exceed the amount)

Tips to avoid mistakes (and losing money)

Do not use REBU if you buy cars from companies with invoices that have deductible VAT; it is not compatible. Carefully check the origin of the vehicle: whether it was acquired from a private individual or a professional. Do not mix tax regimes on a single invoice. If you make self-sales or internal transfers, record them properly.

A frequent mistake is not documenting the purchase well. If you cannot justify the acquisition cost, the tax authority may assume that your margin is the total sale. And that means paying more taxes.

Conclusion

The buying and selling of used cars at a dealership involves more than just showing a car and closing a sale. You must know your tax obligations, declare each operation correctly, and keep the appropriate documentation.

It's not just about “doing things right,” but about protecting your business and optimizing your tax situation. And if you can also rely on systems that make everything easier, that’s even better.

Do you want to know how to declare your sales clearly and orderly?

Visit www.dealcar.io and discover everything you can simplify.

Frequently Asked Questions (FAQ)

What is the REBU regime and when does it apply?
It is a special VAT regime for used goods that taxes on the profit margin. It applies when you buy from private individuals or make operations without the right to VAT deduction.

Can I use REBU if I buy the car from a company?
Only if the company does not issue you an invoice with deductible VAT. Otherwise, you will have to use the general regime.

Do I have to issue an invoice to a private individual?
Yes, but if you’re in REBU it is not mandatory to itemize VAT. It is enough to indicate that VAT is included.

What happens if I do not submit form 347?
It is a tax infraction. You may receive penalties for omitting relevant operations.

How do I know what regime to apply to each operation?
It depends on who sells you the vehicle and whether there is deductible VAT on the purchase. Carefully review the source documentation.