As a professional, is the VAT on Back Market deductible?

Not always! 

There are two reasons for this: 

• Back Market is not yet able to apply the VAT territoriality rules for intra-community B2B transactions.
• Some refurbished products sold on Back Market are subject to the Marginal VAT scheme for which no deductible VAT appears on the invoice. 

How can I find out for which products VAT is deductible on Back Market? 

B2B Invoicing is currently not ideal on our site. We are aware of this and will work in 2022 to improve it. 

Rules for VAT deductibility on Back Market for transactions between professionals with an intra-community VAT number: 

1. VAT is not deductible on intra-community B2B acquisitions for which it should not have been charged. 

Back Market is originally a marketplace dedicated to individuals on which sellers established in various EU countries or outside the EU can sell B2C.

The VAT territoriality rules applied on Back Market are B2C rules, which explains why VAT is systematically invoiced for now (except for products covered by the Marginal  VAT scheme ).

VAT rules are different for B2B sales. Indeed, B2B intra-community supplies of goods (i.e. when the stock is shipped from a Member State different from the buyer's Member State) are exempt from VAT: in this case, if both parties have an intra-community VAT number, the supplier issues an invoice without VAT. The buyer must self-assess the VAT in his own country. 

If VAT is wrongly invoiced for B2B intra-community supplies (when such supplies should have been exempted) the VAT is not deductible. 

2. VAT is not deductible for products sold under the Marginal VAT scheme. 

Marginal VAT is a special scheme applicable only to second-hand goods, including certain refurbished products. Under this scheme, VAT is calculated on the margin instead of  on the selling price (as it is usually the case). This avoids re-taxing second-hand goods that have already been taxed when they were first sold. It’s a tax scheme that favors the circular economy by allowing the resale of second-hand goods at attractive prices!

When a seller applies Marginal VAT scheme, they issue an invoice without VAT and VAT can’t be deducted by professional clients on this purchase.

Not all products sold on Back Market fall under the Marginal VAT scheme. However, we are not yet able to show this information to our customers on our website before the purchase. Until you have placed an order and received the invoice, you cannot know whether a product is sold under Marginal VAT or Standard VAT. If Marginal VAT applies, the amount of VAT will not appear on the invoice and it will not be deductible. 

This FAQ is for informational purposes only and does not constitute legal or tax advice.