Accounting support for car dealerships, franchise agents, car brokers and used vehicle traders in France: margin VAT scheme, dealer register, quitus fiscal, manufacturer year-end bonuses, analytical accounting by department and payroll under IDCC 1090.
An accountant for a car dealership must understand a business model fundamentally different from an auto repair workshop: new vehicle sales with manufacturer pricing constraints, used vehicle trading under margin VAT rules, conditional year-end bonuses, intra-EU acquisitions, a mandatory dealer register and payroll governed by the IDCC 1090 collective agreement.
This page covers dealership and used vehicle trading exclusively. For workshop, repair and parts activities, see our dedicated page accountant for auto repair garages.
A car dealership earns from multiple sources with very different margin profiles: new vehicle sales often carry thin direct margins, supplemented by manufacturer bonuses (RFA), financing commissions and service contract income. Used vehicles can generate higher unit margins but carry stock depreciation risk. The workshop and parts department provide steady recurring margin. Without analytical accounting by department, these flows are invisible in the consolidated accounts.
The first job of the accountant is to build a financial architecture that makes each department's margin readable — not just at year-end, but every month.
A dealership may simultaneously apply three VAT treatments on the same declaration: standard VAT on new vehicle sales; margin VAT on used vehicles bought from private individuals; and standard VAT on used vehicles bought from businesses that deducted VAT on acquisition. Confusing these flows produces an incorrect VAT return and a distorted margin. This is one of the first areas examined in a tax audit of a used vehicle dealer.
The margin VAT scheme applies to used vehicles purchased from parties who did not deduct VAT on acquisition: private individuals, VAT-exempt entities, or other dealers who already applied the margin scheme. VAT is calculated on the dealer's gross margin — the difference between the selling price and the purchase price — not on the full selling price.
Under the margin scheme, the taxable base is the difference between the sale price (including VAT) and the purchase price (excluding VAT). This regime applies only when the vehicle was acquired from:
If the used vehicle came from a rental fleet operator, leasing company or business that deducted VAT on its original purchase, the standard regime applies: 20% VAT on the full sale price.
Critical rule: under the margin scheme, VAT must not appear as a separate line item on the sales invoice. The mandatory mention is: «TVA sur marge — Biens d'occasion — Article 297 A du CGI». Any invoice that shows VAT as a separate charge under this scheme will be disallowed by the tax authorities, triggering recalculation on the full price.
The dealer cannot deduct input VAT on the purchase of used vehicles falling under this scheme. However, VAT on reconditioning labour and parts remains deductible under normal rules.
| Vehicle source | Applicable regime | Invoice reference |
|---|---|---|
| Private individual | Margin VAT (art. 297 A) | «TVA sur marge — art. 297 A CGI» |
| Dealer under margin scheme | Margin VAT | Same |
| Rental or leasing company with VAT deduction | Standard 20% on full price | VAT shown separately |
| New vehicle (any origin) | Standard 20% on full price | VAT shown separately |
| Intra-EU acquisition (used) | Usually country-of-origin VAT; quitus required | Per case |
Every professional buying and reselling used vehicles must maintain a register of second-hand moveable goods, known as the livre de police. This is a criminal-law obligation designed to prevent circulation of stolen goods.
For each vehicle acquired and sold:
The register must be initialled by the local police commissioner or mayor of the jurisdiction where the business is located. It may be kept in paper or electronic form. The retention period is five years from the date the register is closed.
A dealer who cannot produce a complete, properly initialled register faces criminal exposure and significantly weakens their position in any dispute about vehicle provenance. This is not a bureaucratic nuisance — it is a legal safeguard.
When a broker or dealer acquires a vehicle in another EU member state, the French tax authority requires a quitus fiscal — an official document confirming the VAT position — before French registration can be obtained.
The distinction is strict and consequential:
The dealer must file promptly with the local tax office (SIE) with supporting documents: purchase invoice, foreign registration certificate and the appropriate cerfa form. Without the quitus, registration is blocked.
Year-end bonuses — remises de fin d'année or RFA in French — are performance-based discounts granted by the manufacturer to the distributor: sales volumes achieved, financing penetration, customer satisfaction scores, process quality. They can represent a material share of a dealership's actual profitability.
The French matching principle requires that an earned bonus be recorded in the financial year to which it relates, even if the manufacturer's credit note has not yet arrived at year-end. The accounting entry is:
When the credit note arrives, it clears account 4098. Failing to accrue the bonus at year-end understates the result and distorts departmental profitability metrics versus manufacturer targets.
Some RFA payments are conditional: they are only earned if volume or quality thresholds are reached by year-end. At year-end, a reasonable estimate of the probability of hitting these targets is needed. Neither aggressive optimism nor complete omission is acceptable — professional judgement is required.
For a deeper treatment: manufacturer bonuses and their accounting in automotive distribution.
Departmental accounting is the management standard in automotive distribution. While not legally required by French accounting rules, it is almost always contractually required by the manufacturer under the distribution agreement.
| Department | Main revenues | Key costs |
|---|---|---|
| New vehicles | New vehicle sales, financing, insurance | Vehicle acquisition cost, commercial spend, RFA to accrue |
| Used vehicles | Used vehicle sales, financing | Acquisition cost, reconditioning, stock depreciation |
| Workshop / after-sales | Labour, warranties, service contracts | Productive hours, parts, subcontracting |
| Parts | Parts sales (counter and workshop supplied) | Parts purchases, dormant stock, supplier discounts |
| Body repair | Repair labour, insurer billing | Labour, materials, cycle time |
Without this split, it is impossible to determine whether new vehicle sales or used vehicle trading is dragging down profitability, whether the workshop covers its costs or whether parts are delivering adequate margin. This is not academic accounting — this is the operating information a dealer needs to run the business.
For a detailed treatment: analytical accounting in car dealerships and repair garages.
Dealerships, franchise agents and used vehicle traders fall under the Convention Collective Nationale des Services de l'Automobile (IDCC 1090), signed 15 January 1981. It covers all staff: new and used vehicle salespeople, sales managers, service advisers, mechanics, body repair technicians, painters, parts storemen, apprentices and administrative employees.
The branch welfare and supplementary pension organisation is IRP AUTO. Contributions must be paid correctly by staff category.
For a detailed reference: IDCC 1090 automotive collective agreement.
Vehicle stock is the dominant working capital item in a dealership. A new vehicle aged on the forecourt generates financing costs and risks manufacturer sanctions. A used vehicle older than 60 days depreciates in market value. Monthly tracking is essential:
| Indicator | Alert threshold |
|---|---|
| Average age of new vehicle stock | Too high: manufacturer penalty risk |
| Average age of used vehicle stock | Over 60 days: rapid market depreciation |
| Used vehicle stock turn (days to sale) | Long delays signal problem vehicles |
| Gross margin per new vehicle | Too low: review discounting and selling costs |
| Gross margin per used vehicle | Too low: review acquisition and reconditioning |
| Financing penetration rate | Key driver of RFA achievement |
In the dealerships we work with, cash crises frequently trace back to two places: used vehicle stock ageing because of hesitation in taking fair-market markdowns, and RFA expectations that don't materialise at year-end. Disciplined monthly analytical accounting — not just annual accounts — is the only way to avoid these surprises.
We support car dealerships, franchise agents, brokers and used vehicle traders with work that goes far beyond annual accounts production:
For the workshop and repair aspects of your business, see our page accountant for auto repair garages.
For detailed VAT treatment: margin VAT on used vehicles in France 2026.
References:
Up to date as of June 2026. This content is informational; any specific situation requires personalised analysis of facts, documents and current rules.
A car dealership combines new vehicle sales, used vehicle trading, after-sales workshop, parts, body repair, financing, insurance and service contracts. Accounting must handle multiple VAT regimes on the same balance sheet, large rotating stock, conditional manufacturer bonuses and payroll governed by the IDCC 1090 collective agreement. Profitability can only be read department by department — never at the consolidated level alone.
Create distinct analytical codes for new vehicles (standard VAT 20% on full price), used vehicles bought from private individuals (margin VAT scheme, art. 297 A), used vehicles bought with deductible VAT (standard VAT on full price) and intra-EU acquisitions. Mixing these flows produces an incorrect VAT return and a misleading margin.
Every acquisition and disposal of a used vehicle must be recorded in the register without delay, with mandatory information: seller identity, full vehicle description (make, model, registration, VIN, mileage, colour) and payment method. The register must be initialled by the local police commissioner or mayor, and kept for five years after closing.
If the manufacturer's year-end bonus (RFA) has been earned by year-end but the credit note has not yet arrived, record an accrued income entry (debit account 4098 — discounts receivable, credit income or purchase reduction). Do not wait for the credit note: the matching principle applies.
Separate new vehicles, used vehicles, workshop, parts and body repair into distinct profit centres. This structure is usually required by the manufacturer and is essential for reading margin by activity, allocating resources and building a meaningful budget.
Ensure each employee is correctly classified under the IDCC 1090 wage grid (new/used vehicle salesperson, sales manager, service adviser, technician, parts manager, administrative staff). Verify that welfare and supplementary pension contributions are correctly paid to IRP AUTO. A classification gap exposes the business to a back-payment claim for minimum contractual wages.
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The margin VAT scheme (article 297 A of the French Tax Code) applies when a used vehicle was purchased from a non-VAT-registered party (private individual, association, VAT-exempt business) or from another dealer who already applied the margin scheme. VAT is calculated only on the difference between the selling price and the purchase price — it must not appear as a separate line on the invoice. The mandatory mention is: 'TVA sur marge — Biens d'occasion — Article 297 A du CGI'. If the vehicle was purchased from a business that deducted VAT on acquisition (leasing company, rental operator, dealer on a new vehicle), the standard regime applies: 20% VAT on the full sale price.
Any professional who buys and resells used vehicles — dealers, franchise agents, brokers, independent traders — must keep a register of second-hand moveable goods, known as the livre de police. It must be initialled by the local police commissioner or mayor, and retained for five years after the last entry. A missing, incomplete or non-initialled register carries criminal-law exposure and weakens the dealer's position in any dispute about vehicle provenance. The register must record for each transaction: seller identity, vehicle description (make, model, registration, VIN, mileage, colour), acquisition date, price, payment method and resale details.
The quitus fiscal is a document issued by the French tax authority (SIE) certifying the VAT position on a vehicle purchased in another EU member state, required before French registration can be obtained. If the vehicle is fiscally 'new' (less than six months since first registration or fewer than 6,000 km), French VAT at 20% is due. If the vehicle is fiscally 'used' (more than six months and more than 6,000 km), VAT was paid in the country of origin and the quitus confirms no further French VAT is owed. The dealer must file promptly with supporting documents: purchase invoice, foreign registration certificate and the appropriate cerfa form.
A manufacturer's year-end bonus (RFA) is income for the distributor tied to volume or quality targets. Under the French matching principle, it must be recorded in the financial year it relates to, even if the credit note has not yet been received at year-end. Record an accrued income entry: debit account 4098 (discounts receivable) and credit the relevant income account. When the credit note arrives, it clears account 4098. Failing to accrue the bonus at year-end understates the result and distorts departmental profitability metrics versus manufacturer benchmarks.
It is not legally required by French accounting standards, but it is almost always contractually required by the manufacturer under the distribution agreement and is essential for effective management. Without separate profit centres for new vehicles, used vehicles, workshop, parts and body repair, it is impossible to know which department is making money, where margin is being lost and how to allocate commercial and human resources. Profitability can only be understood department by department.
Dealerships, franchise agents, used vehicle traders and related businesses fall under the Convention Collective Nationale des Services de l'Automobile (IDCC 1090), signed on 15 January 1981. It covers all staff: new and used vehicle salespeople, sales managers, service advisers, mechanics, body repair technicians, painters, parts storemen, apprentices and administrative employees. The branch welfare and supplementary pension body is IRP AUTO. Contributions must be correctly categorised and paid in full and on time.
Valuation depends heavily on the quality and remaining duration of the manufacturer distribution contract — a precarious or short-term contract significantly depresses value. Other key factors are the margin profile by department, stock quality and age (new vehicles face manufacturer penalties if stock is old; used vehicles depreciate rapidly), workshop customer retention and service contract backlog, commercial lease terms and key-person dependency. A multiple of EBITDA is commonly used, cross-checked against restated net asset value and a fair stock valuation. An accountant and lawyer must both be involved in reviewing the distribution contract and underlying profitability.
When a dealer takes a used vehicle in part-exchange against a new vehicle sale, the two transactions must be treated separately for VAT purposes. The new vehicle sale is subject to standard 20% VAT on its full price. The part-exchange vehicle is an acquisition at the agreed trade-in price. When the used vehicle is subsequently resold, the applicable VAT regime depends on whether it was acquired with or without deductible VAT — determining whether the margin scheme or standard VAT applies to the resale. Netting the two amounts and calculating VAT on the balance is a common and significant error that distorts both VAT returns and margin reporting.
New vehicle sales are subject to standard 20% VAT on the full sale price, with VAT appearing as a separate line on the invoice. Margin is typically tight due to manufacturer pricing controls, supplemented by RFA bonuses earned against volume or quality targets. Used vehicle sales depend on the original acquisition: if purchased from a private individual, margin VAT applies (no separate VAT line); if purchased from a business with VAT deduction, standard VAT applies (20% on full price). Margin is typically wider on used vehicles but stock depreciation risk is higher. Both require separate analytical tracking to understand which channel is performing.
An incomplete or non-initialled dealer register (livre de police) carries serious criminal-law consequences. The dealer loses a key line of defence in any dispute about vehicle provenance and faces potential accusations of complicity in the circulation of stolen goods. Beyond legal risk, an inadequate register also weakens the business's position with tax authorities during an audit of used vehicle transactions. A dealer must ensure the register is meticulously maintained, properly initialled by the local police commissioner or mayor, and retained for a full five years after closing.
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