Index
What tax obligations are generated by the purchase of a used car
The purchase document from a private individual: what it is and why it is essential
VAT on purchases: when you incur VAT and when you do not
The REBU purchase ledger: what it must include
Tax forms affecting purchases
What happens if you cannot justify the purchase price
Document retention: periods and format
Common errors when declaring used vehicle purchases
Frequently asked questions
What tax obligations are generated by the purchase of a used car
When a dealership buys a used vehicle, the transaction generates different obligations depending on who the seller is. Buying from a private individual is not the same as buying from a leasing company, another dealership, or a business selling its company car. The origin of the vehicle determines the tax treatment of the purchase and, directly, the scheme you will be able to apply on the subsequent sale.
The most important distinction is whether there is VAT on the purchase transaction or not. If you buy from a private individual, there is no VAT: the private individual is not a taxable person for the tax and cannot charge it. If you buy from a business that does charge VAT, you incur it and can deduct it, but this means that upon sale you must apply the general scheme, not the REBU (special scheme for second-hand goods).
This has an immediate practical consequence: the documentation of each purchase is not just a formal requirement. It is the basis that justifies the tax scheme you will apply when selling the vehicle. Without correct documentation of the purchase, you cannot prove to the Tax Agency that you have the right to use the REBU.
The purchase document from a private individual: what it is and why it is essential
When you buy a car from a private individual, you do not receive an invoice because the private individual cannot issue one. Instead, the dealership must generate a purchase document (also called a self-invoice or acquisition document) that certifies the transaction.
This document must include at least:
Date of the transaction
Details of the private seller: full name, national ID (DNI), and address
Vehicle details: make, model, registration plate, chassis number, and mileage
Agreed purchase price
Declaration that the seller is not entitled to deduct VAT
Signature of both parties
The purchase document has two functions. The first is contractual: it certifies that the transfer of ownership has occurred at a specific price. The second is fiscal: it is the receipt that proves the vehicle was acquired from a private individual with no right to deduct VAT, a necessary condition to be able to apply the REBU on resale.
A common mistake is to generate this document with incomplete details, without the chassis number or without the signature of the private individual. In an audit, an incomplete purchase document can lead to the Tax Agency questioning the applicability of the REBU for that specific vehicle.
To understand how this document fits into the full invoicing flow, you can consult the guide on how to issue invoices correctly in car trading.
VAT on purchases: when you incur VAT and when you do not
The treatment of VAT on the purchase varies according to the origin of the vehicle and has direct consequences on the subsequent sale.
Purchase from a private individual: no VAT. The private individual does not charge VAT, so there is no amount to be incurred or deducted. This is the most common origin for applying REBU on resale.
Purchase from another dealership under REBU: no itemised VAT. The invoice does not show VAT separately because the seller also applies REBU. There is no deductible VAT for you, and you can apply REBU on resale.
Purchase from a leasing or fleet company with itemised VAT: you incur VAT at 21% on the purchase price. You can deduct it in your quarterly tax return, but on resale you must apply the general scheme (with itemised VAT on the invoice), not the REBU.
Purchase from another dealership under the general scheme: same as the previous case. The purchase invoice has itemised VAT, you deduct it, and on resale you apply the general scheme.
Purchase at auction with VAT: depends on whether the auction acts as an intermediary under REBU or as a seller under the general scheme. Each invoice must be checked individually.
The practical rule: always check whether the purchase invoice itemises VAT or not. If it itemises it, you can probably deduct it, but you will have to apply the general scheme on resale. If it does not itemise it, apply REBU on the sale. Mixing both schemes in the same business is normal and legal, but each operation must follow its own logic. To delve deeper into when each scheme applies, consult the guide on when to invoice with VAT and when to apply REBU.
The REBU purchase ledger: what it must include
If you apply the REBU, you are obliged to keep a record book of transactions covered by the special scheme, which includes both purchases and sales under this scheme. The purchases section must reflect for each vehicle:
Consecutive transaction number
Acquisition date
Description of the asset: make, model, registration plate, chassis number
Name, tax identification number (NIF), and address of the seller
Acquisition price
This ledger is the document that the Tax Agency may check in an audit to verify that each vehicle sold under REBU was indeed acquired under conditions that allow it. If the record book is incomplete or does not match the sales invoices, the inspector can recalculate the VAT settlement by applying the general scheme to all transactions, with the cost that this implies.
The retention of the record book is mandatory for at least four years from the presentation of the last tax return in which the registered operations appear.
Tax forms affecting purchases
The tax declaration of used vehicle purchases is primarily structured through three forms:
Form 303 (Quarterly VAT). This is where input VAT is declared on purchases with itemised VAT (leasing, fleets, dealerships under the general scheme). This VAT is deducted from the output VAT on sales. If in a quarter you purchased more than you sold and the input VAT exceeds the output VAT, you can request a refund or offset it in subsequent periods. REBU operations do not generate input VAT on purchase, so they are not included in the deductible VAT boxes of Form 303, although the output VAT on sales under that scheme does appear in the specific boxes (11 and 12).
Form 347 (Annual declaration of operations with third parties). This is submitted in February of the following year and lists transactions with suppliers and customers that have exceeded €3,005.06 in the calendar year. Purchases from private individuals are not included because private individuals are not economic operators. Purchases from companies (leasing, fleets, other dealerships) that exceed that amount must be declared. It does not involve payment, it is an informative declaration, but its omission is a tax offense.
Form 190 (Withholdings and prepayments). This is only relevant if you have employees or pay self-employed professionals with withholding. It does not directly affect vehicle purchases.
For intra-community purchases (vehicles acquired in other EU countries), additional forms apply, such as Form 349 (recapitulative statement of intra-community transactions). If you import vehicles from the EU with some regularity, it is advisable to have this aspect well controlled. You can consult the guide on how to declare the import of second-hand vehicles for more details.
What happens if you cannot justify the purchase price
This is one of the issues that costs dealerships the most money in audits. If the Tax Agency reviews your operations and you cannot documentarily prove the price at which you acquired a vehicle, it can apply the most unfavorable criterion: assume your purchase price was zero and calculate the REBU margin on the total sales price.
This turns a transaction with a margin of €2,000 (on which you would pay around €350 in tax) into a transaction with a margin of €12,000 (on which you would pay more than €2,000 in tax). The same car, without purchase documentation, can multiply the VAT amount payable by six.
The situation worsens if the inspector considers that the lack of documentation is systematic: in that case, they can extend the criterion to all transactions of the audited period, not just those with individual problems.
The solution is simple in theory, although it requires discipline: generate and keep the purchase document for each vehicle at the time of acquisition, before the car enters stock.
Document retention: periods and format
Documents related to each vehicle purchase must be kept during the tax limitation period, which generally is four years from the submission of the tax return to which they refer. In practice, the usual recommendation is to keep them for six years to cover potential audits of previous years with some special limitation period.
The documents that must be kept for each purchased vehicle are:
Purchase document from a private individual (or invoice if the seller is a company)
Proof of payment (bank transfer, signed receipt)
Vehicle technical spec sheet at the time of purchase
DGT report consulted before purchase (proves the vehicle's status and the absence of liens at that moment)
The format can be digital as long as the authenticity and integrity of the document are guaranteed. A digitally signed or scanned PDF stored in a management system is valid. Paper documents kept in physical folders are also valid, but they are more difficult to retrieve when needed.
Having these documents linked directly to the digital file of each vehicle in the DMS is the most efficient way to ensure they are available when needed, without manual searches. Dealership management KPIs include indicators of time in stock and margin per vehicle that are only accurate if the purchase price is correctly recorded from the very first moment.
Common errors when declaring used vehicle purchases
Not generating the purchase document at the time of acquisition. Trying to reconstruct it later (when an audit arrives or when there is a claim from the seller) is much more difficult and less reliable than doing it on the spot.
Including vehicles in the REBU ledger that do not meet the requirements. If a vehicle was purchased with deductible itemised VAT, it cannot appear in the REBU ledger. Mixing transactions from both schemes in the same ledger invalidates it.
Declaring purchase prices below the real price to reduce the REBU margin in a subsequent sale. This is tax fraud. The Tax Agency cross-checks data from tax returns with market prices and vehicle transfer databases. Significant discrepancies trigger audits.
Failing to declare purchases from companies that exceed the threshold in Form 347. The informative declaration is frequently omitted thinking that "it does not involve payment". It involves penalties.
Keeping purchase documents separate from sales documents. When an audit arrives, the inspector wants to see the complete transaction for each vehicle: purchase, preparation expenses, and sale. If the documents are in different places, reconstructing each car's file takes time and leads to errors. To avoid this problem, see how dealership stock management errors operate that have the greatest impact on daily activities.
More than 750 dealerships already use Dealcar to manage their daily operations
Dealcar centralises each vehicle's documentation right from purchase: the purchase document from a private individual, DGT report, preparation invoice, sales contract, and final invoice are linked to the vehicle's file and available at any time. The REBU ledger is updated automatically with each transaction, and the quarterly forms are prepared with the data already organised.
If you want to see how it works for your type of business, you can schedule a free demo at dealcar.io.
Frequently asked questions
Do I have to declare car purchases from private individuals in Form 347?
No. Form 347 records transactions with third parties who are business owners or professionals. Private individuals do not have this status, so purchases from private individuals are not included in the declaration, regardless of the amount.
Can I deduct the VAT on preparation expenses for a car bought under REBU?
Yes. The fact that the vehicle will be sold under REBU does not prevent you from deducting the input VAT on repairs, spare parts, cleaning, or any prep expense. What you cannot deduct is the VAT on the purchase of the vehicle itself (which on purchases from private individuals does not exist). Operating expenses of the business generate deductible VAT regardless of the sales scheme.
Is a purchase document signed only by the buyer (the dealership) valid?
No. The purchase document must be signed by both parties: the private seller and the buying dealership. The signature of the private individual certifies their consent regarding the price and the transfer of ownership. Without that signature, the document has much less probative value in the event of a dispute or audit.
What happens if I buy a car with an active retention of title?
A vehicle with an active retention of title cannot be transferred without first clearing that lien. If you buy it without verifying this point, you may run into problems when processing the change of ownership. Checking the DGT report before each purchase avoids this situation. To understand what charges can affect the transfer, you can review the guide on how to remove an embargo from a car.
When do I have to submit Form 303 if I apply REBU?
Form 303 is submitted quarterly (the first 20 calendar days of April, July, October, and January) or monthly if you are registered under the monthly VAT return scheme. REBU transactions are declared in boxes 11 and 12 of the form with the output VAT calculated on the margin.
Index
What tax obligations are generated by the purchase of a used car
The purchase document from a private individual: what it is and why it is essential
VAT on purchases: when you incur VAT and when you do not
The REBU purchase ledger: what it must include
Tax forms affecting purchases
What happens if you cannot justify the purchase price
Document retention: periods and format
Common errors when declaring used vehicle purchases
Frequently asked questions
What tax obligations are generated by the purchase of a used car
When a dealership buys a used vehicle, the transaction generates different obligations depending on who the seller is. Buying from a private individual is not the same as buying from a leasing company, another dealership, or a business selling its company car. The origin of the vehicle determines the tax treatment of the purchase and, directly, the scheme you will be able to apply on the subsequent sale.
The most important distinction is whether there is VAT on the purchase transaction or not. If you buy from a private individual, there is no VAT: the private individual is not a taxable person for the tax and cannot charge it. If you buy from a business that does charge VAT, you incur it and can deduct it, but this means that upon sale you must apply the general scheme, not the REBU (special scheme for second-hand goods).
This has an immediate practical consequence: the documentation of each purchase is not just a formal requirement. It is the basis that justifies the tax scheme you will apply when selling the vehicle. Without correct documentation of the purchase, you cannot prove to the Tax Agency that you have the right to use the REBU.
The purchase document from a private individual: what it is and why it is essential
When you buy a car from a private individual, you do not receive an invoice because the private individual cannot issue one. Instead, the dealership must generate a purchase document (also called a self-invoice or acquisition document) that certifies the transaction.
This document must include at least:
Date of the transaction
Details of the private seller: full name, national ID (DNI), and address
Vehicle details: make, model, registration plate, chassis number, and mileage
Agreed purchase price
Declaration that the seller is not entitled to deduct VAT
Signature of both parties
The purchase document has two functions. The first is contractual: it certifies that the transfer of ownership has occurred at a specific price. The second is fiscal: it is the receipt that proves the vehicle was acquired from a private individual with no right to deduct VAT, a necessary condition to be able to apply the REBU on resale.
A common mistake is to generate this document with incomplete details, without the chassis number or without the signature of the private individual. In an audit, an incomplete purchase document can lead to the Tax Agency questioning the applicability of the REBU for that specific vehicle.
To understand how this document fits into the full invoicing flow, you can consult the guide on how to issue invoices correctly in car trading.
VAT on purchases: when you incur VAT and when you do not
The treatment of VAT on the purchase varies according to the origin of the vehicle and has direct consequences on the subsequent sale.
Purchase from a private individual: no VAT. The private individual does not charge VAT, so there is no amount to be incurred or deducted. This is the most common origin for applying REBU on resale.
Purchase from another dealership under REBU: no itemised VAT. The invoice does not show VAT separately because the seller also applies REBU. There is no deductible VAT for you, and you can apply REBU on resale.
Purchase from a leasing or fleet company with itemised VAT: you incur VAT at 21% on the purchase price. You can deduct it in your quarterly tax return, but on resale you must apply the general scheme (with itemised VAT on the invoice), not the REBU.
Purchase from another dealership under the general scheme: same as the previous case. The purchase invoice has itemised VAT, you deduct it, and on resale you apply the general scheme.
Purchase at auction with VAT: depends on whether the auction acts as an intermediary under REBU or as a seller under the general scheme. Each invoice must be checked individually.
The practical rule: always check whether the purchase invoice itemises VAT or not. If it itemises it, you can probably deduct it, but you will have to apply the general scheme on resale. If it does not itemise it, apply REBU on the sale. Mixing both schemes in the same business is normal and legal, but each operation must follow its own logic. To delve deeper into when each scheme applies, consult the guide on when to invoice with VAT and when to apply REBU.
The REBU purchase ledger: what it must include
If you apply the REBU, you are obliged to keep a record book of transactions covered by the special scheme, which includes both purchases and sales under this scheme. The purchases section must reflect for each vehicle:
Consecutive transaction number
Acquisition date
Description of the asset: make, model, registration plate, chassis number
Name, tax identification number (NIF), and address of the seller
Acquisition price
This ledger is the document that the Tax Agency may check in an audit to verify that each vehicle sold under REBU was indeed acquired under conditions that allow it. If the record book is incomplete or does not match the sales invoices, the inspector can recalculate the VAT settlement by applying the general scheme to all transactions, with the cost that this implies.
The retention of the record book is mandatory for at least four years from the presentation of the last tax return in which the registered operations appear.
Tax forms affecting purchases
The tax declaration of used vehicle purchases is primarily structured through three forms:
Form 303 (Quarterly VAT). This is where input VAT is declared on purchases with itemised VAT (leasing, fleets, dealerships under the general scheme). This VAT is deducted from the output VAT on sales. If in a quarter you purchased more than you sold and the input VAT exceeds the output VAT, you can request a refund or offset it in subsequent periods. REBU operations do not generate input VAT on purchase, so they are not included in the deductible VAT boxes of Form 303, although the output VAT on sales under that scheme does appear in the specific boxes (11 and 12).
Form 347 (Annual declaration of operations with third parties). This is submitted in February of the following year and lists transactions with suppliers and customers that have exceeded €3,005.06 in the calendar year. Purchases from private individuals are not included because private individuals are not economic operators. Purchases from companies (leasing, fleets, other dealerships) that exceed that amount must be declared. It does not involve payment, it is an informative declaration, but its omission is a tax offense.
Form 190 (Withholdings and prepayments). This is only relevant if you have employees or pay self-employed professionals with withholding. It does not directly affect vehicle purchases.
For intra-community purchases (vehicles acquired in other EU countries), additional forms apply, such as Form 349 (recapitulative statement of intra-community transactions). If you import vehicles from the EU with some regularity, it is advisable to have this aspect well controlled. You can consult the guide on how to declare the import of second-hand vehicles for more details.
What happens if you cannot justify the purchase price
This is one of the issues that costs dealerships the most money in audits. If the Tax Agency reviews your operations and you cannot documentarily prove the price at which you acquired a vehicle, it can apply the most unfavorable criterion: assume your purchase price was zero and calculate the REBU margin on the total sales price.
This turns a transaction with a margin of €2,000 (on which you would pay around €350 in tax) into a transaction with a margin of €12,000 (on which you would pay more than €2,000 in tax). The same car, without purchase documentation, can multiply the VAT amount payable by six.
The situation worsens if the inspector considers that the lack of documentation is systematic: in that case, they can extend the criterion to all transactions of the audited period, not just those with individual problems.
The solution is simple in theory, although it requires discipline: generate and keep the purchase document for each vehicle at the time of acquisition, before the car enters stock.
Document retention: periods and format
Documents related to each vehicle purchase must be kept during the tax limitation period, which generally is four years from the submission of the tax return to which they refer. In practice, the usual recommendation is to keep them for six years to cover potential audits of previous years with some special limitation period.
The documents that must be kept for each purchased vehicle are:
Purchase document from a private individual (or invoice if the seller is a company)
Proof of payment (bank transfer, signed receipt)
Vehicle technical spec sheet at the time of purchase
DGT report consulted before purchase (proves the vehicle's status and the absence of liens at that moment)
The format can be digital as long as the authenticity and integrity of the document are guaranteed. A digitally signed or scanned PDF stored in a management system is valid. Paper documents kept in physical folders are also valid, but they are more difficult to retrieve when needed.
Having these documents linked directly to the digital file of each vehicle in the DMS is the most efficient way to ensure they are available when needed, without manual searches. Dealership management KPIs include indicators of time in stock and margin per vehicle that are only accurate if the purchase price is correctly recorded from the very first moment.
Common errors when declaring used vehicle purchases
Not generating the purchase document at the time of acquisition. Trying to reconstruct it later (when an audit arrives or when there is a claim from the seller) is much more difficult and less reliable than doing it on the spot.
Including vehicles in the REBU ledger that do not meet the requirements. If a vehicle was purchased with deductible itemised VAT, it cannot appear in the REBU ledger. Mixing transactions from both schemes in the same ledger invalidates it.
Declaring purchase prices below the real price to reduce the REBU margin in a subsequent sale. This is tax fraud. The Tax Agency cross-checks data from tax returns with market prices and vehicle transfer databases. Significant discrepancies trigger audits.
Failing to declare purchases from companies that exceed the threshold in Form 347. The informative declaration is frequently omitted thinking that "it does not involve payment". It involves penalties.
Keeping purchase documents separate from sales documents. When an audit arrives, the inspector wants to see the complete transaction for each vehicle: purchase, preparation expenses, and sale. If the documents are in different places, reconstructing each car's file takes time and leads to errors. To avoid this problem, see how dealership stock management errors operate that have the greatest impact on daily activities.
More than 750 dealerships already use Dealcar to manage their daily operations
Dealcar centralises each vehicle's documentation right from purchase: the purchase document from a private individual, DGT report, preparation invoice, sales contract, and final invoice are linked to the vehicle's file and available at any time. The REBU ledger is updated automatically with each transaction, and the quarterly forms are prepared with the data already organised.
If you want to see how it works for your type of business, you can schedule a free demo at dealcar.io.
Frequently asked questions
Do I have to declare car purchases from private individuals in Form 347?
No. Form 347 records transactions with third parties who are business owners or professionals. Private individuals do not have this status, so purchases from private individuals are not included in the declaration, regardless of the amount.
Can I deduct the VAT on preparation expenses for a car bought under REBU?
Yes. The fact that the vehicle will be sold under REBU does not prevent you from deducting the input VAT on repairs, spare parts, cleaning, or any prep expense. What you cannot deduct is the VAT on the purchase of the vehicle itself (which on purchases from private individuals does not exist). Operating expenses of the business generate deductible VAT regardless of the sales scheme.
Is a purchase document signed only by the buyer (the dealership) valid?
No. The purchase document must be signed by both parties: the private seller and the buying dealership. The signature of the private individual certifies their consent regarding the price and the transfer of ownership. Without that signature, the document has much less probative value in the event of a dispute or audit.
What happens if I buy a car with an active retention of title?
A vehicle with an active retention of title cannot be transferred without first clearing that lien. If you buy it without verifying this point, you may run into problems when processing the change of ownership. Checking the DGT report before each purchase avoids this situation. To understand what charges can affect the transfer, you can review the guide on how to remove an embargo from a car.
When do I have to submit Form 303 if I apply REBU?
Form 303 is submitted quarterly (the first 20 calendar days of April, July, October, and January) or monthly if you are registered under the monthly VAT return scheme. REBU transactions are declared in boxes 11 and 12 of the form with the output VAT calculated on the margin.
