When is VAT on second-hand vehicles eligible for claiming?

The eligibility to claim VAT on second-hand vehicles is specifically associated with purchases made from registered dealers. When second-hand vehicles are sold by registered dealers, they typically charge VAT on the sales price of the vehicle, and this VAT can be claimed by the buyer, assuming they are eligible to reclaim VAT. This means that businesses or individuals who are VAT registered can reclaim the VAT paid, which reflects the input tax they have incurred in their business operations.

In contrast, when vehicles are purchased from private sellers, these transactions are usually not subject to VAT, as private individuals are not registered for VAT and do not charge VAT on sales. Therefore, there is no VAT to claim in such cases. Thus, the correct focus is on the transaction type and the seller's VAT registration status, which is why purchasing from a registered dealer is the key condition for claiming VAT on second-hand vehicles.