What is the Margin Scheme and How is VAT on Margin Calculated

The Margin Scheme (REBU in Spain) is the Special Scheme for Second-Hand Goods, Works of Art, Antiques, and Collectors’ Items. It is an optional VAT scheme where the taxable base is the reseller’s profit margin rather than the total transaction price.

Its primary objective is preventing double taxation. When buying goods from private individuals, no deductible input VAT is borne. Re-taxing the full selling price at 21% would tax value already subjected to VAT when first sold. In Spain, it is regulated under Articles 135 to 139 of the Spanish VAT Act (Ley 37/1992).

It applies to movable tangible property previously used by third parties, suitable for reuse, and acquired for resale, in addition to works of art, antiques, and collector’s items. The Tax Agency explicitly excludes certain goods from being considered second-hand: scrap materials, containers, packaging, raw gold, platinum, and precious gems. The scheme also covers the resale of used vehicles, a case with its own management rules that falls outside this guide; for that sector there is WhatsAuto.

This exclusion is vital for jewelers. Pre-owned estate jewelry resold as an intact piece qualifies for the scheme. In contrast, gold purchased for melting down is excluded, as the subject of the transaction is raw metal rather than a reusable second-hand good.

When you renovate or transform an item yourself, that item ceases to qualify as second-hand and its supply falls outside the scheme. Article 136 of Spanish VAT Law 37/1992 defines renovation precisely: operations aimed at maintaining original characteristics when costs exceed the initial purchase price.

This is where many businesses make critical mistakes, and where a restoration workshop determines compliance. If you buy a chest of drawers for €400 and spend €600 restoring it, renovation costs exceed purchase price and the sale cannot be invoiced under the Margin Scheme. If you spend €250, it qualifies. The threshold depends on acquisition cost, not profit margin.

A real workshop case. An antique dealer acquired a 19th-century walnut bureau from an estate lot for €480. It had to be treated for woodworm and its damaged marquetry restored, with fine materials and period veneer. Between chargeable materials and cabinetmaker hours, the in-house workshop cost had reached €430. A traditional French polish finish was still pending, quoted at a further €90. Total restoration cost would thus have reached €520, above the €480 purchase price.

Carrying out that finish in-house, or subcontracting it and charging it to the item's record, would have made the bureau lose its legal status as a second-hand good. The later sale closed at €1,400. Under the Margin Scheme only the margin is taxed: €920 of gross margin and roughly €159 of VAT. Outside the scheme it would have to be invoiced under standard VAT, and on that same VAT-inclusive price of €1,400 the liability rises to €242.98. That is more than half the real profit on the transaction. The decision was to keep the conservation work to the essential minimum, without exceeding €480, and to leave the final cosmetic finish as optional, for the buyer's account. That way the special scheme holds up under an inspection.

The margin is the difference between selling price (VAT included) and purchase price (VAT included). The taxable base is derived by removing VAT using the formula published by the Tax Agency: taxable base = margin × 100 ÷ (100 + applicable tax rate).

Here is an example for an item purchased for €500 and sold for €1,500 at the standard 21% rate:

It is an alternative calculation method: instead of transaction-by-transaction, the margin is calculated collectively across the entire reporting period. However, it is strictly limited and unavailable to general retail.

The Tax Agency restricts this method to stamps, stamped paper, collector coins and banknotes; sound/video recordings; and books or periodicals. Any other item requires prior authorization from Tax Management, granted only upon proving high volume and low individual prices.

Therefore, an antique dealer or second-hand store operates by default item by item. If global margin is negative, taxable base is zero and negative margin carries forward to subsequent periods, requiring annual inventory regularizations.

No. It is an optional regime applied on a transaction-by-transaction basis. The Tax Agency confirms that resellers may opt to apply standard VAT to any sale without prior formal notice.

A key exception applies: businesses authorized for global margin calculation remain bound to that method for all qualifying goods and cannot freely opt out per sale.

The invoice cannot separate or display the VAT amount. It must contain the mandatory statutory notation set by Article 6 of Royal Decree 1619/2012: "Régimen especial de los bienes usados", "Régimen especial de los objetos de arte", or "Régimen especial de las antigüedades y objetos de colección".

VAT is deemed included in the total gross price. This mention is crucial: it informs the buyer that input VAT is non-deductible.

No, it is not deductible for the purchaser. The Tax Agency confirms that input VAT is non-deductible for buyers because tax amounts are not itemized on invoices.

Similarly, the reseller cannot deduct input VAT on goods acquired for resale under the scheme. However, general business overheads (telephone, rent, repairs, supplies) remain 100% deductible.

Book the invoice for its full total gross amount without itemizing VAT, and do not include it in deductible input VAT. The transaction is fully valid: the seller applied a legitimate tax regime, and the invoice simply grants no tax deduction right.

If you planned to deduct VAT, review your bookkeeping before filing quarterly returns. This is one of the most frequent adjustments when accounting for second-hand purchases.

Yes. You may waive the special scheme for any individual sale and invoice under the standard VAT scheme with itemized VAT. In that case, VAT must be charged on the entire selling price, not on the margin.

Calculate beforehand which option is optimal. Waiving makes sense when selling to business clients needing VAT deduction, but is disadvantageous when selling to retail consumers.

A specific official register book, distinct from general VAT ledgers, recording each acquisition, import, and sale subject to the scheme individually. The Tax Agency outlines mandatory columns: description, purchase invoice number, purchase price, sales invoice number, sale price, VAT charged, and scheme applied.

Tracking this on general spreadsheets is error-prone. Each individual item carries its own tax decision, which must be fully justifiable during a tax inspection.

Registration or election is communicated via census tax return Form 036, ticking the special scheme in the VAT section. Election for global profit margin must be filed at commencement of activity or in December prior to the tax year of effect.

Waivers cannot take effect until the end of the following calendar year, binding the business for at least two fiscal years.

VeriFactu does not alter margin tax calculations, but changes how invoices must be generated and certified. The system mandates chained, unalterable billing records, taking effect January 1, 2027 for corporations and July 1, 2027 for self-employed professionals under Royal Decree-law 15/2025 published in the BOE on December 3, 2025.

For second-hand businesses, invoices issued from uncertified spreadsheets will become non-compliant. Invoices must be generated from an authorized computerized billing system fulfilling Royal Decree 1007/2023 regulations.