Margin Scheme Taxation

ARTBUTLER supports the Margin scheme taxation that is widely used on the secondary art market. It enables you to account for VAT only on the difference between the price you paid for an item and the price at which you sell it – the margin.

Marking Works Designated to Margin Scheme Taxation

Works that meet the criteria for margin scheme taxation can be marked on the Costs tab using the Taxation mode drop-down at the bottom of the price overview. This makes them easy to find, offers the possibility to mark these prices in price lists accordingly and will issue a warning if you try to add one of these works to an invoice set to an inappropriate taxation mode.

Choosing Margin Scheme Taxation in an Invoice

To use the Margin taxation scheme, please select it from the related mode drop-down menu in the invoice or offer in the first step, then add the invoice works. In the price dialogue of the works the purchase price and resulting margin is shown as well as the relevant VAT rate for the margin. You may set all price details as usual except the ‘effective’ VAT rate based on the full amount of the final price that is calculated automatically for your information only.

Please note that you will probably need a specialised export template to export an invoice in Margin scheme taxation mode that might not indicate the VAT but shows a standardised legal note referring to the taxation mode instead.

Settings

The relevant VAT rate for the margin scheme taxation as well as the flate rate margin in percent has to be set in the artbutler Preferences on the Invoices tab before you start using this mode.

There you may also define a short text or sign that could be shown in price lists next to works designated to Margin scheme taxation, e.g. an asterisk *. To include this tag in an export please add the related placeholder ${w.vatMark} to your price list template.

Legal Requirements

The requirements for using a margin scheme may vary from country to country, usually it only applies if you can’t reclaim VAT on the price of the purchase, for example from businesses or individuals who are not registered for VAT, or from businesses selling under the scheme; only certain goods are eligible, e.g. second hand goods or works of art.