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I'm in another Schengen country waiting for a residence permit. I can buy a car - if I pay cash. I'm planning on buying used but don't want to pay taxes twice. In this country I can even buy it already register for almost a year without needing to do anything, and I can use my US driver's license.

I'm going to Germany within a few months. I'm really tired of not having a car, but I am saving money. And I will definitely have better choices to buy a car that I want in Germany than this country.

Nonetheless, I'm curious. If I did find a car I liked in this country, and it was already registered in this country, and then I moved to Germany in a couple months, would I have to pay a huge tax on the vehicle?

Assume that the VAT is the same between Germany and this country. I'm not comparing tax rates, I'm trying to see about the tax rules for buying and registering in or out of Germany.

Would I pay more tax by buying a used car in another EU country for some time; would I pay less tax overall, assuming same make, model, and year, and same purchase price, from a private seller in Germany when I get there, versus the sane car here first and them moving to Germany in a couple months?

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    Note that what is relevant for VAT purposes is the fact the origin country is in the EU, not Schengen (which is relevant for immigration purposes, not goods). Whether the car is new or used (and possibly its age) may be relevant. Note also that for some vehicles (probably quite old ones), you may not have a EU certificate of conformity and may need a new certificate of conformity to be able to register it in Germany, and that could even require changes to the car.
    – jcaron
    Commented Mar 8, 2023 at 13:43
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    How is anybody supposed to know whether the tax in Germany would be higher or lower than the country you're in if you don't tell us which country you're in?
    – Chris H
    Commented Mar 8, 2023 at 13:52
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    Remember that you must exchange your US driver's license after a certain amount of time when you reside in another country (just as, in most cases, you need to do when moving to another US state). In Germany this period is 6 months after taking up residence.
    – Mark Johnson
    Commented Mar 8, 2023 at 14:00
  • Yes, I have 6 months. My drivers license state has reciprocity with Germany (fortunately) so all I have to do is take a written test and exchange my license in Germany within 6 months.
    – travel
    Commented Mar 8, 2023 at 14:24
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    The important regions here is not Schengen (passport/visa rules only) or even EU, but "EU Vat Area" en.wikipedia.org/wiki/…
    – CMaster
    Commented Mar 8, 2023 at 15:31

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It's hard to answer without knowing which is this "other Schengen country".

However, from my own experience :

  • I've bought a used car in Switzerland from a dealership. It was ~30% cheaper than in my own country (France).
  • The day I bought it, the dealership declared to Swiss authority I've bought this car "for export". I had one month to do the necessary paperwork in France, and I paid only ~200CHF as taxes / temporary insurance. They gave me a temporary Swiss licence plate and I could drive everywhere in Europe for 1 month.
  • Then I had one month to declare it legally in France, and I paid 20% VAT. So finally it was 10% cheaper than buying it in my home country.

However, the custom officer told me this 20% VAT is not to be paid if I could proove I was moving from Switzerland to France. It was not the case for me but maybe it is for you, as you're waiting for a residence permit in this "another country".

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First of all, EU and Schengen Area are not the same. Schengen is irrelevant in this case. If you buy a car in a non-EU country (it could also be a Schengen country such as Norway or Switzerland) and then want to register it in Germany, you would have to pay customs tariffs in addition to taxes. Basically all paperwork will be much more complicated. Not recommended in your case.

So let's focus on the EU: If you're buying a new car (less than 6000 km odometer and less than 6 months since 1st registration), you have to pay VAT in the country where you're going to register it (NOT where you buy it).

If it's a used car (more than 6000 km odometer and/or more than 6 months since first registration), there are the following options: 1. if you buy from a dealership, the VAT will be included in the amount and nothing can be done about it 2. if you buy from a private person, there's no VAT to pay.

EDIT: Anyway, there are still certain costs associated with legally moving a car from one EU country to another. Overall, it could amount to several hundreds of euros. But those are not taxes, just administrative fees.

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  • I will not be buying a new car. Used.
    – travel
    Commented Mar 8, 2023 at 14:22
  • Are you saying that if I buy a used car from a private seller there is no VAT, either inside or outside Germany?
    – travel
    Commented Mar 8, 2023 at 14:23
  • Exactly, but this applies only within the EU. If you buy a used car for your private use (not as a company) and the seller is also a private person (not a company), there's no VAT to pay. The seller might need to pay income tax (depending on local laws), but that's not your problem.
    – Johnnyjanko
    Commented Mar 8, 2023 at 14:29
  • wow, if accurate that's a huge relief!
    – travel
    Commented Mar 8, 2023 at 14:30
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    @traveladdict your question is about VAT. It doesn't mention administrative fees at all.
    – phoog
    Commented Mar 9, 2023 at 1:42

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