DEFINITION
The margin scheme is a special VAT regime for second-hand goods. Instead of charging VAT on the full selling price, the dealer pays VAT only on the margin: the selling price minus the purchase price.
It applies when the dealer bought the goods without being able to deduct VAT, typically from a private person or from another dealer who itself sold under the margin scheme. That makes it common for used and refurbished phones and laptops.
Two practical consequences: the invoice must say that the margin scheme applies and must not show VAT separately, so the buyer cannot deduct it; and a margin-scheme sale to another EU country is not a 0% intra-community supply, it stays taxed in the seller's country. Mixing margin-scheme and ordinary stock without clear records is a frequent audit issue.
HOW KOLIBRA HELPS
In Kolibra you can mark a sale or a purchase as margin scheme. It is then flagged for review instead of being treated as an ordinary 0% intra-EU supply, and the deal keeps its real purchase cost, so the margin is known per piece.