Reduced VAT of 4% on the purchase of second-hand cars for people with disabilities

The acquisition of a vehicle is an important decision that requires a significant investment. However, for people with disabilities, this decision can be even more challenging due to specific needs and required adaptations. Fortunately, there are some tax advantages available to help these individuals cope with this expense. In this article, we will explore how VAT is reduced to 4% when purchasing used cars for people with disabilities.

Introduction to Reduced VAT on Used Cars

The Value Added Tax (VAT) is a tax applied to goods and services in Spain. Normally, the VAT for the purchase of a car is 21%. However, people with disabilities can benefit from a significant reduction of VAT to 4% when purchasing a used car.

This measure aims to facilitate mobility and promote social inclusion of people with disabilities.

Requirements to Obtain VAT Reduction

To benefit from this VAT reduction, certain requirements must be met:

• The individual must have a disability recognized officially, which may vary depending on the autonomous community. Generally, the inability to use public transportation is measured through a points system. To qualify for this type of assistance, 7 points or more are usually required.

• The acquired vehicle must be used exclusively by the person with disabilities or for their transportation.

• If the vehicle is driven by another person, it must be used only for the transportation of the person with disabilities.

It is important to emphasize that these requirements are mandatory and must be demonstrated to the relevant tax authorities.

Documentation Required to Obtain the Reduction

To apply for the VAT reduction, certain supporting documentation must be submitted:

• Updated disability certificate issued by the competent authority.

• Vehicle documentation (technical file and circulation permit).

• Proforma invoice or budget of the vehicle showing the price broken down without taxes.

• It is recommended to submit a signed letter by the beneficiary, explaining their case.

This documentation will be reviewed by the Tax Agency before granting the tax reduction.

Obtaining the Disability Certificate

The disability certificate is an official document that certifies the degree and type of disability that a person has. This certificate is issued by the Base Centers dependent on IMSERSO or the competent bodies of the Autonomous Communities.

To obtain it, it is necessary to undergo a medical evaluation that determines the degree of disability.

Application for VAT Reduction

Once the disability certificate is obtained, the VAT reduction should be requested at a tax office. This application must be accompanied by the previously mentioned documentation. You can do it.

Once the documentation is reviewed and it is confirmed that all requirements are met, the Tax Agency will issue a certificate that certifies the right to apply the reduced rate of 4% when purchasing the vehicle.

Communication to the Dealer

With this certificate in hand, it is necessary to communicate to the dealer that you will benefit from the VAT reduction.

The dealer must apply this tax rate in the final invoice and keep a copy of the certificate to justify this application before the Tax Agency.

Beneficiaries of the VAT Reduction

The VAT reduction not only benefits people with reduced mobility but also:

• Retirees due to total, absolute, or severe disability

• People with visual impairments or blindness affiliated with ONCE

• Those who have obtained a disability certification through their Autonomous Community.

The conditions to apply for the VAT reduction may vary depending on the Autonomous Community. It is true that the Tax Agency does not clarify it too much, and that is why it is a very unknown aid. Generally, the percentage of disability is not as important, but the mobility score that usually appears at the bottom of the certificate is. As a requirement, the Tax Agency may require 7 points or more.

Owner of the Vehicle

In theory, the owner of the vehicle can be either the person with disabilities or another person (direct family member), as long as the vehicle is used for the transportation of the person with disabilities. However, our recommendation to avoid penalties is that the holder should be the beneficiary of the aid.

Driver of the Vehicle

The driver of the vehicle does not have to be the person with disabilities. It can be any other person, as long as the car is used for the transportation of the person with disabilities.

Types of Vehicles Eligible for VAT Reduction

The vehicles that can benefit from this VAT reduction are those intended for the transportation of people with reduced mobility, whether adapted for wheelchairs or without modifications, as long as they are used regularly for this purpose.

As a curious fact, the Tax Agency does not set any economic limit when choosing the vehicle.

Wheelchair-Adapted Cars

Wheelchair-adapted vehicles are those that have been specifically modified to facilitate the safe access and accommodation of a wheelchair.

These vehicles typically feature ramps, lifts, or special systems that allow the wheelchair to be anchored to the car floor.

Cars with Modifications

Some cars may need certain modifications to be driven by people with specific disabilities.

These modifications may include:

• Special systems on the pedals

• Adaptive steering wheels

• Electronic devices that facilitate driving

Cars without Modifications

Not all cars require modifications. Some models already come equipped from the factory with features such as:

• Rotating seats

• Automatic sliding doors

That facilitate access to the interior of the car for people with reduced mobility.

Post-Purchase: Proper Use

It is essential to remember that the car acquired under these conditions must be used exclusively for the transportation of the person with disabilities.

Any misuse may result in penalties.

What Happens if We Want to Sell a Car Acquired with Reduced VAT?

If a used car has been acquired with this significant assistance and you want to sell it for any reason, there are two possibilities:

• If less than 4 years have passed since the purchase of the vehicle, the Tax Agency will request the payment of the unpaid VAT at the time of sale.

• If 4 years or more have passed since the purchase of the vehicle, the sale is completely free, and the Tax Agency cannot claim anything.