VES 2018

[inlinesix]

Retail in DE lower than OMV declared in SG?

Merc E200 starts from EUR 46k. Excl VAT of 19%, it is EUR 39k or SGD63k.

 

This is without any option.

[inlinesix]

European high end cars suffer luxury tax penalty worse than our ARF.

You sure Germany got luxury tax？

 

By the way, Merc is premium car. Maybach is luxury car.

Edited September 25, 2018 by Davidtch

[Voodooman]

Merc E200 starts from EUR 46k. Excl VAT of 19%, it is EUR 39k or SGD63k.

 

This is without any option.

Without knowing what is the typical retail margin of Mercedes Benz in Gemany, this discussion is not going to prove anything. C&C margin for the E200 is $50k.

 

I agree there is incentive to press down OMV and profit share via other channels like volume incentives, etc, but tax authority here and in Germany will be on the constant lookout for transfer pricing. Germany tax authority can just google onemotoring and all will be revealed.

Edited September 25, 2018 by Voodooman

[inlinesix]

Without knowing what is the typical retail margin of Mercedes Benz, this discussion is not going to prove anything. C&C margin for the E200 is $50k.

 

I agree there is incentive to press down OMV and profit share via other channels like volume incentives, etc, but tax authority here and in Germany will be on the constant lookout for transfer pricing. Germany tax authority can just google onemotoring and all will be revealed.

 

Importer is Merc Sg.  AD is C&C.  OMV is based on factory to Importer.  Accordingly, the real margin is unknown.

 

I believe Global company has different wholesale price for different market. 

 

As long as there is no intention of transfer of profit to low tax jurisdiction, there should not be any transfer pricing issue for Germany tax authority.

 

Nowadays, transfer pricing is all about proper documentation including inter-company contracts.  Talk to your CFO on this topic.  He/She might curse due to the onerous documentation required.

[alamak88]

I think you guys are overstating how AD and PI under declare OMV. Spore customs are experienced in spotting under declaration of OMV and have hauled a no.of PI to court recent years and the penalty is i think 10x the amt of under declared taxes. OMV and the margin of each car model is actually quite transparant...u can check it here...

https://www.onemotoring.com.sg/content/dam/onemotoring/pdf/Car_Cost_Update.pdf

From the list u can see PML make a whopping $81+k for a 520i base model

[Wt_know]

minus $20k overtrade ... another $5k freebies / rebates / kickbacks / vouchers

a high $50k+ margin ....

that’s about right for entry level 5-series

Edited October 3, 2018 by Wt_know

[inlinesix]

I think you guys are overstating how AD and PI under declare OMV. Spore customs are experienced in spotting under declaration of OMV and have hauled a no.of PI to court recent years and the penalty is i think 10x the amt of under declared taxes. OMV and the margin of each car model is actually quite transparant...u can check it here...

https://www.onemotoring.com.sg/content/dam/onemotoring/pdf/Car_Cost_Update.pdf

From the list u can see PML make a whopping $81+k for a 520i base model

For PI, it is ez to catch understatement of OMV. It is based on retail price of car sold.

 

For importer, there is no yardstick for custom to determine wholesaler price. It is either btw 2 subsidiary of the same group or holding sell to subsidiary.

[andrewyewkc]

For PI, it is ez to catch understatement of OMV. It is based on retail price of car sold.

 

For importer, there is no yardstick for custom to determine wholesaler price. It is either btw 2 subsidiary of the same group or holding sell to subsidiary.

You are right, once my friend (AD) told me he flew to Japan and "negotiated" with his principal that they want the cars below a certain OMV for above a certain volume and that's it. Of course the cars will come in really bare.

[alamak88]

For PI, it is ez to catch understatement of OMV. It is based on retail price of car sold.

 

For importer, there is no yardstick for custom to determine wholesaler price. It is either btw 2 subsidiary of the same group or holding sell to subsidiary.

OMV is actually not retail price (MSRP). From PI perspective, OMV is closer to the cost of good (veh) + some AD margin of LHD veh from UK, HKG, south africa authorised dealer. OMV can be between 5-30% lower than MSRP (not incl netting off local VAT) depending on model.

In any case, veh excise tax is based uniformly on the same est OMV regardless if its AD or PI. Wholesale price doesnt really matter.

[weak_pig]

If I get a new car with VES band A with rebate of 10K, the price in the AD's pricelist is already inclusive of the rebate or not yet?

 

Also, what happens to the VES rebate if I resell the car after couple of years (not scrap)? I guess since the rebate is already baked into my purchase price, the car will just depreciate accordingly after X years? I won't be forced to sell at lower value due to the rebate savings right?

[Wt_know]

VES is already factored in the "selling price" whether it's +$10K or -$10K

when you resell car ... it's all about the price offered by the used car dealer or AD for trade in

as simple as that

 

If I get a new car with VES band A with rebate of 10K, the price in the AD's pricelist is already inclusive of the rebate or not yet?

Also, what happens to the VES rebate if I resell the car after couple of years (not scrap)? I guess since the rebate is already baked into my purchase price, the car will just depreciate accordingly after X years? I won't be forced to sell at lower value due to the rebate savings right?

 

[weak_pig]

VES is already factored in the "selling price" whether it's +$10K or -$10K

when you resell car ... it's all about the price offered by the used car dealer or AD for trade in

as simple as that

Thank you!

[Eyke]

If I get a new car with VES band A with rebate of 10K, the price in the AD's pricelist is already inclusive of the rebate or not yet?

 

Also, what happens to the VES rebate if I resell the car after couple of years (not scrap)? I guess since the rebate is already baked into my purchase price, the car will just depreciate accordingly after X years? I won't be forced to sell at lower value due to the rebate savings right?

ur paper/residual value (PARF specifically) will be less compared to cars with less/no rebate

[Wt_know]

with $10k rebate means you pay less ARF

less ARF = less PARF

you pay what you get

but the question is whether the rebate is “truly” factored in the selling price in view of lower ARF

Edited December 24, 2018 by Wt_know

[weak_pig]

regarding the VES rebate, can someone verify if this is how it works (based on my perception)?

 

If you are a new car buyer, the rebate would benefit you, but if you are the owner of a 10-yr old VES rebate car, then you will lose out because the ARF you get back after scrap will be lesser minus the rebate.

 

In short, it benefits the new owner, but a resale VES rebate car owner who scraps the car will lugi. Correct?

[Friendstar]

regarding the VES rebate, can someone verify if this is how it works (based on my perception)?

 

If you are a new car buyer, the rebate would benefit you, but if you are the owner of a 10-yr old VES rebate car, then you will lose out because the ARF you get back after scrap will be lesser minus the rebate.

 

In short, it benefits the new owner, but a resale VES rebate car owner who scraps the car will lugi. Correct?

You are right in a way.

 

However , as a resale buyer, I'll be looking to press down the car price and argue on the basis that the parf is low.

 

It's all about first hand information and negotiation tactics.

[Eyke]

cannot just see PARF without considering the price or vice versa

 

all are numbers that go into calculating depreciation.

[inlinesix]

regarding the VES rebate, can someone verify if this is how it works (based on my perception)?

 

If you are a new car buyer, the rebate would benefit you, but if you are the owner of a 10-yr old VES rebate car, then you will lose out because the ARF you get back after scrap will be lesser minus the rebate.

 

In short, it benefits the new owner, but a resale VES rebate car owner who scraps the car will lugi. Correct?

 

As owner of new car, you will never know whether you are getting VES rebate or not.

 

It is opaque to the extent in the calculation of new car price.