Dealers: stock and sales

The margin scheme (VAT) for a used-watch dealer in France

A dealer who resells a watch bought from a private individual may pay VAT on the margin only, not on the whole selling price. This guide sets out what French law says, until 31 December 2026 and from 1 January 2027, and says what it could not read.

The principle, until 31 December 2026

For supplies of second-hand goods made by a dealer who bought them from someone not liable to VAT, or from someone not entitled to charge VAT on that supply, the taxable amount is the difference between the selling price and the purchase price (article 297 A of the General Tax Code, Code général des impôts).

The definition of a second-hand good is left to a decree. The tax authority's guidelines (BOFiP) report it as follows: a tangible movable good fit for re-use, as it is or after repair. They do not name watches. On a reading of that text, a used watch bought from a private individual falls within this definition.

What this changes for VAT and the invoice

The dealer cannot deduct the VAT included in the purchase price of goods whose supply is taxed on the margin (article 297 D, I, 2°).
The buyer cannot deduct the VAT included in the selling price of a good taxed on the margin (article 297 D, I, 1°).
The invoice does not show the VAT (article 297 E).
The invoice carries a reference to the provision of the General Tax Code, or of European Union law, under which the transaction falls under the margin scheme (annex II, article 242 nonies A, I-12°, as reported by the BOFiP). No fixed wording was read.
Transactions in these goods are accounted for separately, by taxation method (article 297 F).
For each supply, the dealer may apply the ordinary VAT rules (article 297 C): VAT is then paid on the full price.

How the margin is calculated

The calculation is in principle made watch by watch: selling price minus purchase price. Only sales that make a margin are taxed, and a loss on one watch is not set against the margin on another (BOFiP, BOI-TVA-SECT-90-20-20, version of 13 August 2021).

The margin so calculated is an amount including tax, which is brought back to a pre-tax amount by multiplying it by 0.833 at the 20% rate. The BOFiP's example: a vehicle bought for €1,830 from a private individual and resold for €2,600 including tax gives a margin of €770, that is €641.41 before tax, and €128.28 of VAT to pay.

The Code also provides for a global determination of the margin for each filing period: total supplies minus total purchases for the period, any excess of purchases carried to the next period, and an annual stock adjustment (article 297 A, II). In its version of 13 August 2021, the BOFiP presents it as a tolerance when the purchase price of each good cannot be known precisely, calculated each month. To be checked with an accountant.

Servicing, precious metals, a new watch

Repair and renovation. The BOFiP distinguishes repair, which gives the good back its initial characteristics, from renovation. There is renovation when the pre-tax value of the items used to put the good back in condition exceeds the value of the used good plus the pre-tax cost of the operation; the good then loses its second-hand status and follows the rules for new goods (BOI-TVA-SECT-90-10, version of 20 March 2024). The BOFiP does not speak of watches: applying this test to a service is a reading, to be checked.

Precious metals. The BOFiP excludes precious metals and precious stones as such, but says that worked objects, even partly made of precious metal, follow the ordinary rules and may be second-hand goods. A gold watch is not cited: to be checked.

A new watch. A good that a business acquired new and resells without having used it is not a second-hand good (BOFiP).

From 1 January 2027

Articles 297 A, 297 C, 297 D, 297 E and 297 F are repealed as from 1 January 2027 by ordinance no. 2025-1247 of 17 December 2025. The scheme moves into the code of taxes on goods and services (code des impositions sur les biens et services, CIBS), in the chapter « Second-hand goods and works of art, collectors' items and antiques » (articles L. 252-1 to L. 252-17, version of 1 January 2027 resulting from ordinance no. 2026-671 of 27 July 2026).

A second-hand good is a tangible movable good that has been used, that has kept its functions or whose functions have been restored, and whose modifications go no further than that restoration and do not give it a value higher than before its use; categories of metals and stones set by order are excluded (article L. 252-2).
It is eligible when the dealer buys it from a private individual or a non-taxable legal person, from certain taxable persons, or from another dealer who applied the margin scheme (article L. 252-6).
The dealer may set the margin scheme aside for one or several transactions, under conditions set by order (article L. 252-8). The buyer does not deduct VAT on a good taxed on the margin (article L. 252-9).
The taxable amount is the consideration for the sale, minus what the dealer paid its supplier; if the result is negative, the taxable amount is nil (article L. 252-12).
A global determination for each filing period is possible, with calculation rules set by decree (article L. 252-14).
For the invoice, article L. 216-33 leaves to a decree the mandatory and the forbidden mentions. That decree was not read.

What Provena Studio does

For each watch, Studio records its purchase price and its selling price, and calculates the actual margin. It does not issue invoices and does not calculate VAT: the margin scheme is applied in your invoicing and accounting tools, with your accountant.

The texts

Official texts read on 10 November 2026.

Provena Studio

Provena Studio is the working tool of watch workshops and watch dealers: repairs from reception to handover, stock, purchases and consignment.

Request a demo. The request goes out by e-mail: we answer ourselves to arrange a meeting.

Written from field feedback and the official texts; it is not legal advice. It is a translation of the French guide. Published on 10 November 2026. Lire en français