Intra European tax authorities - data exchange?

[Zaiga]

Hey guys!

do you know if inside the EU the Tax authorities are exchanging the data, in the following case:
Person A - buys an expensive car in country A (for cash)
Person A - sells the car in another country B (for wire)

Would they be able to connect the two?

Thank you!

 

[Martin Everson]

Hey guys!

do you know if inside the EU the Tax authorities are exchanging the data, in the following case:
Person A - buys an expensive car in country A (for cash)
Person A - sells the car in another country B (for wire)

Would they be able to connect the two?

Thank you!

In general no if you bought and sold to private persons. If you buy from a dealership there maybe cash transaction reporting thresholds depending on your country. But if you have exported the car and it is de-registered with licensing agency and marked as exported in the country you purchased it then the trail ends there.

 

[JohnnyDoe]

If you buy cash in Germany there are no problems.
But you need to register the car somewhere to resell it. The best way to do so is to use a German agency: they will register the car temporarily on themselves for the purpose of selling it and then wire you the money. However, this way you cannot skip VAT on the original purchase.
If you register the car outside Germany, local authorities will ask you for proof of purchase and payment.

 

[Zaiga]

In general no if you bought and sold to private persons. If you buy from a dealership there maybe cash transaction reporting thresholds depending on your country. But if you have exported the car and it is de-registered with licensing agency and marked as exported in the country you purchased it then the trail ends there.

If you buy cash in Germany there are no problems.
But you need to register the car somewhere to resell it. The best way to do so is to use a German agency: they will register the car temporarily on themselves for the purpose of selling it and then wire you the money. However, this way you cannot skip VAT on the original purchase.
If you register the car outside Germany, local authorities will ask you for proof of purchase and payment.

Thank you for your replies!

The only issue I see here is the following:
There is a contract on which my name is written (the one I sign during buying the car).
The seller will present the contract at his bank to deposit the money. -> The authorities will "theoretically" have my name.

I will sell the car and my self get the money wired.

Are the bank supervisor bodies yet advanced enough to track me down, due to the cash contract, and ask me questions?

 

[Martin Everson]

Are the bank supervisor bodies yet advanced enough to track me down, due to the cash contract, and ask me questions?

With large deposits of cash at an EU bank coming from same counter-party (you) there is always the risk of the cash deposits being flagged as suspicious by the bank and reported to relevant authority. That's when the drama starts. It only takes an eagle eyed bank employee to spot a pattern if you are using the same car dealer and your name keeps popping up.

Also I don't know which country you are dealing with. This makes a massive difference.

 

[JohnnyDoe]

With large deposits of cash at an EU bank coming from same counter-party (you) there is always the risk of the cash deposits being flagged as suspicious by the bank and reported to relevant authority. That's when the drama starts. It only takes an eagle eyed bank employee to spot a pattern if you are using the same car dealer and your name keeps popping up.

There is no need to deposit cash, and no need to use the same car dealer. Just find the best deals on autoscout24 and mobile.de, it’s easy to spot scams.

Also I don't know which country you are dealing with. This makes a massive difference.

Cash in Germany is still easy to use.

You can also make a profit in this game, but you need to use a vat registered company otherwise you will find it difficult to resell at a good price.

 

[Martin Everson]

Yeah unfortunately I don't know reason OP is buying cars from a dealer in cash. I also don't know which country he is dealing with. I initially thought it was a private person he would be buying cars from. Dealerships just complicate things.

 

[Zaiga]

Yes thats what I meant buying from privat. I wouldn’t deposit any money myself:

Again to make it more clear:
1.) Buy a car for cash from a privat person
2.) Sell the car to a privat person / dealership get in return a wire transfer

The only issue I see here, is if the privat person in 1.) deposits the money to his account that anyone would (somehow) be able to connect it. But I doubt it.

 

[Martin Everson]

OK then you got very little to worry about. Only issue to worry about is if you are doing it in volume. The reason being that buying cars for cash with "street money" and exporting them to other countries etc has been the oldest money laundering trick in the book. It has been around since I was a kid at least. If authorities see like 20 cars a month regsistered for export in your name....well you can imagine what will happen next .

 

[JimBeam]

It's a quite common way for money laundering.

Some countries have a limits so you can't sell more than couple cars per year - otherwise they will consider this to be your business and you would have to register.