Dáil Éireann Debate, Wednesday - 17 January 2024
327. Deputy Noel Grealish asked the Minister for Finance the reason the VRT refund scheme was originally set up; if it was to comply with an EU directive; how much it cost to set up the scheme; and if he will make a statement on the matter. [56862/23]
View answerSince 8 April 2013, a person exporting a passenger car from the State may claim for repayment of a portion of the Vehicle Registration Tax (VRT). The VRT export repayment scheme was introduced under the Finance Act 2012, which inserted Section 135D into the Finance Act 1992. The scheme allows for repayment of residual VRT based upon the vehicle’s value at the time of export, subject to a minimum value and an administration charge.
Prior to the introduction of the scheme, parties exporting vehicles had no way of recouping the residual VRT in a vehicle and, in 2010 the European Commission initiated infringement proceedings against Ireland on the basis that “the effect of the Irish provisions relating to Vehicle Registration Tax is a disproportionate obstacle to the freedom to provide services for leasing companies in other Member States who wish to offer their services to Irish residents”. The Commission’s case was that by charging VRT on the full value of a vehicle leased to an Irish citizen by a foreign leasing company the vehicle then had a residual, “trapped” VRT element that made these vehicles less competitive for subsequent leasing outside of the State on completion of the original lease term. Following a careful analysis, the export repayment scheme was provided for in the 2012 Finance Act to address the particular concern in relation to freedom of services for leasing companies.
When the scheme was introduced section 135D(4)(b) of the Finance Act 1992 provided that an administration charge of €500 be deducted from the amount of VRT refunded upon export of a vehicle. The charge was to recoup the costs associated with setting up and running the scheme, including developing the necessary information technology platform and interfaces. The administrative charge was subsequently reduced to €100 per vehicle from 1 January 2016 under the Finance Act 2015; by that time, the necessary systems were in place and operating effectively.
I have been informed that information on the total set-up costs is not readily available.
