What is Marginal VAT? Complete Guide for B2B Used Apple Device Buyers
What Is Marginal VAT?
Marginal VAT (also known as the margin scheme or differential taxation) is a special VAT regime that allows sellers of second-hand goods to pay VAT only on their profit margin rather than on the full selling price. For B2B buyers of used Apple devices, this means significantly lower purchase prices compared to standard VAT-inclusive deals.
Under normal VAT rules, VAT is charged on the entire sale price. With the margin scheme, the taxable amount is reduced to the difference between the dealer's purchase price and selling price. This creates real savings that flow directly to you as the buyer.
How Does Marginal VAT Work for Used Apple Devices?
When a wholesaler like FF Wholesale buys used iPhones, iPads, or MacBooks from private individuals or other margin-scheme sellers, no VAT is deducted on the purchase because the original seller was not VAT-registered or sold under the margin scheme themselves. The wholesaler then sells the device forward and charges VAT only on the margin (the profit), not on the full resale price.
Here is a step-by-step breakdown:
- FF Wholesale purchases a used iPhone 15 Pro from a private seller for EUR 500. No input VAT is deductible on this purchase.
- FF Wholesale sells the same iPhone 15 Pro to a B2B buyer for EUR 600.
- The margin is EUR 100 (selling price minus purchase price).
- VAT is calculated only on that EUR 100 margin instead of the full EUR 600.
The buyer receives an invoice that states the margin scheme was applied. The invoice does not show a separate VAT line, which means the buyer cannot deduct VAT on this purchase --- but the total price is substantially lower than a standard VAT deal would be.
How Much Can You Actually Save? A Concrete Example
Let us compare two scenarios for a bulk order of 100 used iPhone 14 units.
Scenario A: Standard VAT (21%)
| Amount | |
|---|---|
| Net unit price | EUR 350 |
| VAT per unit (21%) | EUR 73.50 |
| Gross unit price | EUR 423.50 |
| Total for 100 units | EUR 42,350 |
| VAT recoverable by buyer | EUR 7,350 |
| Effective cost after VAT deduction | EUR 35,000 |
Scenario B: Marginal VAT (margin scheme)
| Amount | |
|---|---|
| Unit price (margin scheme) | EUR 380 |
| VAT shown on invoice | EUR 0 (included in margin) |
| Total for 100 units | EUR 38,000 |
| VAT recoverable by buyer | EUR 0 |
| Effective cost | EUR 38,000 |
In Scenario A the buyer pays EUR 42,350 upfront and waits to recover EUR 7,350 in VAT --- effectively paying EUR 35,000 but tying up capital. In Scenario B the buyer pays EUR 38,000 outright with no VAT administration or cash-flow delay. For many small and mid-sized businesses the lower upfront cost, simplified accounting, and zero VAT recovery waiting time make the margin scheme the better choice.
The real-world savings depend on the dealer's margin. At FF Wholesale, our margins on used Apple devices typically range between 8--15%, meaning the embedded VAT portion in the price is minimal, and buyers benefit from prices that can be 5--12% lower than equivalent standard-VAT offers.
Who Can Benefit from Marginal VAT?
The margin scheme is available to any B2B buyer purchasing used goods from a dealer who applies the scheme. You do not need any special registration or permit. Specifically, these buyer types benefit most:
- Mobile phone repair shops that buy used devices for parts harvesting or refurbishment and resale
- E-commerce resellers who sell refurbished Apple products through online marketplaces and value lower acquisition costs over input VAT deduction
- Telecom operators and dealers running trade-in or device leasing programs who need steady volume at competitive prices
- IT asset disposition (ITAD) companies that process corporate fleets of Apple hardware
- Pawnshops and second-hand retailers operating across the EU
If your business model does not depend on reclaiming input VAT (for example, because you are a VAT-exempt small enterprise, or because the margin-scheme price is simply lower than the net price in a standard-VAT deal), the margin scheme is almost always advantageous.
What Is the Legal Basis for Marginal VAT?
The margin scheme is established by EU VAT Directive 2006/112/EC, specifically Articles 311 through 325 (Title XII, Chapter 4 --- Special arrangements). These articles define:
- Article 311: Definitions of second-hand goods, works of art, collectors' items, and antiques
- Articles 312--316: The margin scheme for taxable dealers, including how the taxable amount (profit margin) is calculated
- Articles 317--325: Transitional arrangements and special provisions for certain member states
Every EU member state has transposed these articles into national law, so the scheme is recognized across the entire European Union. In the Czech Republic, the relevant national provision is Section 90 of Act No. 235/2004 Coll. (Czech VAT Act).
Which Countries Accept the Margin Scheme?
The margin scheme is valid in all 27 EU member states. Because it is based on a binding EU directive, every country must offer it. This includes major markets such as:
- Germany, France, Italy, Spain, the Netherlands
- Czech Republic, Poland, Slovakia, Hungary, Romania
- Austria, Belgium, Ireland, Portugal, Greece
- All Scandinavian EU members (Sweden, Denmark, Finland)
- The Baltic states (Estonia, Latvia, Lithuania)
Cross-border transactions within the EU can also use the margin scheme. When FF Wholesale sells margin-scheme goods from Prague to a buyer in Germany or Poland, the margin scheme still applies and the buyer receives the same benefit. The key requirement is that the goods were originally acquired under conditions that allowed the margin scheme (purchased from a private individual, another margin-scheme dealer, or certain exempt entities).
How Does FF Wholesale Apply the Margin Scheme?
At FF Wholesale, the majority of our used Apple device inventory qualifies for the margin scheme. Here is how we handle it:
- Sourcing: We purchase devices from private individuals, corporate trade-in programs, leasing returns, and other margin-scheme dealers across Europe. Because these sellers either are not VAT-registered or sell under the margin scheme themselves, we apply the margin scheme on resale.
- Grading and testing: Every device goes through a rigorous 30-point inspection covering cosmetic condition, battery health, and full functionality. Devices are graded (A/B/C) according to industry standards.
- Invoicing: Our invoices clearly state "Margin scheme -- second-hand goods" (or the Czech equivalent "Zvlastni rezim --- pouzite zbozi") in accordance with Article 314 of Directive 2006/112/EC.
- Documentation: We maintain full traceability records for every device, including serial numbers, purchase origin, and test reports. This ensures compliance and gives our buyers confidence in the supply chain.
- Pricing: Because VAT applies only to our margin, our gross prices are substantially lower than standard-VAT wholesale prices for equivalent devices.
Whether you order 10 units or 10,000, the margin scheme applies to every qualifying device.
What Are the Benefits for Different Buyer Types?
Repair Shops
You buy devices for parts or screen harvesting. With the margin scheme, your acquisition cost per unit drops, which directly improves the profitability of each repair. You are unlikely to reclaim input VAT on parts you harvest, so the lower gross price is a pure win.
E-Shops and Online Resellers
You resell on Amazon, eBay, or your own store. The margin scheme lets you buy at a lower entry price, giving you more room to price competitively or protect your margin. When you resell to end consumers, you charge standard VAT on your own selling price as usual.
Telecom Dealers
You run trade-in or device-as-a-service programs. Consistent, competitive wholesale pricing is essential. The margin scheme lets you secure volume at lower unit costs, which is critical when you operate on thin margins per subscriber.
ITAD and Corporate Resellers
You process corporate Apple fleets being retired. The margin scheme simplifies the VAT treatment of these devices as they move through the secondary market.
Frequently Asked Questions
Can I still deduct input VAT on a margin-scheme purchase?
No. When you buy under the margin scheme, the invoice does not show a separate VAT amount, so there is no input VAT to deduct. However, the total price you pay is typically lower than the net price (before VAT) you would pay in a standard deal, so you still come out ahead.
Does the margin scheme apply to brand-new Apple devices?
No. The margin scheme is strictly for second-hand goods (and certain works of art, antiques, and collectors' items). New devices from authorized distributors are always sold under standard VAT rules.
Is the margin scheme legal for cross-border B2B sales within the EU?
Yes. The margin scheme applies to intra-Community supplies of second-hand goods. When FF Wholesale sells margin-scheme goods from the Czech Republic to a buyer in another EU country, the margin scheme is maintained. The transaction is not treated as an intra-Community supply for VAT purposes, which means the buyer does not need to account for acquisition VAT (reverse charge does not apply to margin-scheme sales).
How do I verify that my supplier is correctly applying the margin scheme?
Check that the invoice includes a clear reference to the margin scheme (e.g., "Margin scheme --- second-hand goods" or the national-language equivalent). The invoice must not show a separate VAT line. Your supplier should also be able to provide documentation showing that the goods were originally acquired under conditions that qualify for the margin scheme.