Vol. 420 No. 4
102 Mr. Kenny asked the Minister for Finance if VAT is payable on the same motor vehicle in two countries of the EC; if he will outline the position in so far as such payments are concerned, and if he will make a statement on the matter.
In the case of a new motor vehicle, payment of VAT in two EC member states should not normally arise. The dealer selling the car in the member state of export should apply the zero rate of VAT and the tax would be charged by the revenue authorities in the importing member state at the VAT rate applicable there.
The position in regard to second hand vehicles is more complex. Cross-frontier sales involving private individuals are covered by a special scheme of relief whereby the charge of VAT in the importing member state is adjusted to take account of tax previously paid in the exporting country. Application of these rules effectively preclude double taxation. No such rules have been agreed at community level to cater for sales of used cars between dealers in different member states or between dealers and private individuals situated in different countries so incidences of double taxation can arise. Discussions are currently underway at EC level to establish a regime which will seek to ensure that double taxation in such cross-frontier transactions is avoided.
