I propose to take Questions Nos. 158 and 159 together.
I am advised by the Revenue Commissioners that under section 132 of Finance Act 1992 vehicle registration tax (VRT) is chargeable, leviable and payable on the registration of vehicles in the State. There is no provision in law for an exemption from, or reduction in, the charge to VRT in relation to vehicles that were previously registered in another jurisdiction.
VRT is charged on the open market selling price (OMSP) of a vehicle in the State. OMSP is defined in section 133 of the Finance Act 1992 and is the price, inclusive of all taxes and duties, which a vehicle may reasonably be expected to fetch on a first arm's length sale in the open market in the State by retail. The OMSP of new vehicles in the State is declared to the Revenue Commissioners by wholesale distributors of new vehicles, while the OMSP of imported second hand vehicles is determined by the Revenue Commissioners based on factors such as age, mileage and vehicle condition.
In order to provide the same base for the application of VRT on vehicles sourced in the State and abroad, VRT is charged on the OMSP of the vehicle and not on the purchase price of vehicles bought in other jurisdictions. The amounts, levels or types of tax charged on a vehicle in another jurisdiction, while they might impact on the purchase price of the vehicle in that jurisdiction, are not taken into account in the calculation of the OMSP in the State.
From a European Union perspective, VRT is a national tax and does not contravene EU law. Article 90 of the EC Treaty allows Member States to charge national taxes provided that there is no discrimination against imported goods in favour of indigenous goods. It provides that:
"No Member State shall impose, directly or indirectly, on the products of other Member States any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products".
This principle was further underpinned by a European Court of Justice (ECJ) judgement (Case C-313/05, Maciej Brzezinski v Dyrektor Izby Celnej w Warszawie) of 18 January 2007, where the ECJ ruled in favour of Poland regarding their entitlement to charge an excise duty on the importation of second-hand vehicles into that jurisdiction.
Accordingly, in the case of a vehicle brought into Ireland from another jurisdiction, VRT is payable on the registration of the vehicle in the State, irrespective of whether or not a registration (or similar) tax had been paid previously outside the State.