Is an unused item still a second-hand good?

Whether anyone ever used an item does not decide whether it is second-hand.

You buy a lot from a private person. Shoes that were never worn and stayed in the box. A dinner service that sat in a cupboard for fifty years. Bottles that were never opened. Can you use the margin scheme, or is this "new" stock?

The French tax administration answered that question on 19 August 2026. The answer is yes — and the reasoning rests on European rules that also apply in Belgium, the Netherlands and the UK.

What the ruling actually says

The question was: where a consumer bore the VAT for good and never used the item, keeping it in its original packaging, does it remain a second-hand good?

The answer: whether the goods were physically used or not is irrelevant to the classification. What counts is that the goods kept the functions they had when new, and that the VAT on them was already borne by someone who could not reclaim it.

Source: BOFiP, ruling BOI-RES-TVA-000270 of 19 August 2026 (news item ACTU-2026-00098), on article 297 A of the French tax code. Checked on 1 September 2026.

Why it is about the VAT, not the wear

The margin scheme exists to prevent one thing: the same VAT being paid twice.

A private person who buys something pays VAT and can never deduct it. If they later sell it to a dealer, that VAT is still baked into the price. Charging VAT on the full resale price would tax the same amount a second time. Hence tax on the margin alone.

That reasoning does not depend on wear and tear. It depends on who bore the tax. The Court of Justice of the European Union put it that way back in 2017.

Judgment of 18 January 2017, case C-471/15, Sjelle Autogenbrug. The definition itself is in article 311(1)(1) of Directive 2006/112/EC.

Does this hold in the other countries?

The definition comes from the same EU directive, and all four countries copy it almost word for word. Nowhere does it say the goods must have been used.

The conditions that still apply

Use being irrelevant does not mean everything qualifies. Two conditions remain.

1. The goods must be suitable for further use, as they are or after repair.
2. You must have bought them from someone who could not charge VAT — a private person, or a dealer who sold under the margin scheme themselves.

On that second point there is a nuance worth keeping: the ruling states that the private seller's sales must stay small and infrequent enough not to make them a taxable person. If your seller offers lots every week, "they are a private person" is no longer a safe assumption.

What still falls outside

• Goods consumed on first use.
• Goods that cannot be used again as they are — waste, worn material, items beyond use.
• Precious metals and precious stones, which are excluded from the definition.

Works of art, collectors' items and antiques are not "second-hand goods" under this definition — but they have their own place in the same margin scheme, with extra rules of their own.

What you keep in your stock list

This ruling changes nothing in your admin. What it does remove is a doubt that often led to the wrong call: keeping unused pieces out of the margin scheme, and paying VAT on the whole selling price instead.

What you keep recording per item: who you bought it from, what you paid, and that the seller could not charge VAT. That is what an inspector wants to see — not whether the piece shows signs of use.

Frequently asked questions