Value Added Tax Consolidation Act 2010 section 89

Margin scheme - auctioneers

Section 89 sets out the auction margin scheme, under which an auctioneer selling certain works of art, collectors' items, antiques or second-hand goods at public auction is liable to VAT only on the profit margin.

• The auction scheme applies where an auctioneer sells qualifying goods on behalf of a principal who was not entitled to deduct VAT on the acquisition of those goods, such as a private individual, an exempt person, an insurer disposing of goods taken in settlement of a claim, or a taxable dealer who already applied the margin scheme.
• The taxable amount is the auctioneer's margin — the difference between the total amount received from the purchaser and the amount paid to the principal — less the VAT included in that margin.
• The auctioneer must issue written transaction details to both the purchaser and the principal, and may not show VAT separately on any invoice; where the principal is an accountable person, the auctioneer's documentation is deemed to be a VAT invoice issued by the principal.
• Auction scheme goods dispatched to a VAT-registered person in another EU Member State are not zero-rated as intra-Community supplies; the place of supply is deemed to be the Member State from which dispatch begins, and Irish VAT must be accounted for on the margin.