Auction glossary
VAT on buyer's premium
Also known as · VAT on buyer's commission
- Definition
- The value added tax charged on the buyer's premium, which pays for a service provided by the auction house. Its rate and calculation depend on the country of sale, the tax status of the lot and sometimes the buyer's location.
In many systems the premium is taxed even when the hammer price itself is not, while under a margin scheme the VAT may be included in the premium without being shown. Exports can change the treatment. These rules vary by jurisdiction and should be confirmed with a tax adviser.
In Selloff, a default tax is assigned to each automatically generated invoice line type, per branch. An option limits VAT on the premium to the share attributable to lots subject to VAT.
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