How do you know if you have purchased stock with fraudulent VAT?

Many of you have asked us this question and are worried that you have already bought "fake VAT on margin". A supplier contacts you and offers a stock of refurbished iPhones at an unbeatable price. Everything looks normal and the commercial conditions are ideal. What's more, the stock is offered at VAT on Margin, which is a very advantageous scheme if you're a reseller !

So why be wary?

Because when you buy 'fake' VAT on margin, you are also liable in the event of an inspection. Investigators consider that professional purchasers are supposed to know the points of verification and cannot ignore the law. So we've prepared a checklist for you to memorise so you don't fall into the trap: :

 

1 ) The supplier's stock and the supplier itself must be based in an EU country. If the stock comes from the USA, then VAT on margin is impossible.

2) The invoice (if French) must bear the following statement: "Products sold with VAT margin are subject to the special VAT margin scheme for second-hand goods, in accordance with Article 297 A of the General Tax Code". In English, at least the words "VAT Margin" must appear.

3) The products must have been purchased from a private individual in the European Union by a company that manages VAT on margin: telecoms operators, shop networks, online trade-in operators. This information can be checked on the https://sickw.com A paying but very reliable site for finding out the origin of your IMEI and the last telecoms operator under contract. Other options such as "Find my Phone" are also available.

What happens during an inspection ?

A sworn officer will visit your shop, or you will receive a letter from the Direction Générale des Finances Publiques (DGFIP) asking you to look at your suppliers' details and related invoices, down to the IMEI.

 

What happens next? If one of your stocks is subject to incorrect VAT treatment because the supplier is known to the DGFIP or because one of the above criteria has not been met, a VAT adjustment will be made. 

The controller will use the amounts including VAT as a reference base excluding VAT to calculate the amounts of VAT that you should have deducted and collected on resale.

 So if you resold your reconditioned iPhone for €150 incl. VAT for €200: the VAT collected should have been €33.33 (20% VAT on resale) and not €8.33 (VAT on margin). The €25 difference is due to the tax authorities.

 So if you resold your reconditioned iPhone for €150 incl. VAT for €200: the VAT collected should have been €33.33 (20% VAT on resale) and not €8.33 (VAT on margin). The €25 difference is due to the tax authorities.

Don't worry ! 

At Dipli, our certification and referencing team takes the subject very seriously. Before listing a factory's reconditioned stock, we check all the points listed above. All your purchase invoices are up to standard and stored in your personal space at www.dipli.com. In the event of an inspection, we're here to help you save time, with complete peace of mind.

See you soon !

Dipli simplifies the second life of electronic products.

An all-in-one tool for distributors, leasing companies, telecom operators and companies to manage the entire value chain in one place.

The platform connects the electronics industry to secondary markets; simply and securely. Trade-in and return management, refurbishment, omni-channel purchasing and distribution: Dipli covers and simplifies all stages of the circular economy.