Michael Healy-Rae
Question:68. Deputy Michael Healy-Rae asked the Minister for Finance if the cost of importing a car can be reviewed (details supplied); and if he will make a statement on the matter. [11177/24]
View answerWednesday, 6 March 2024
Questions (68)
Written answers
Where a country is not a member of the European Union, it must be treated as a ‘third country’ for VAT and customs purposes. The UK’s relationship with the European Union is somewhat more complicated, in that while most of the UK is outside of the European Union with regards to VAT and customs, Northern Ireland remains within the European Union from the perspective of the supply of goods. This means that where items, including vehicles, can be shown to have Union Goods Status, they are not subject to VAT and customs import requirements. Union Goods means goods that have origin in or are in free circulation in the European Union, including Northern Ireland.
Where a vehicle is imported from the UK (excluding Northern Ireland) to Ireland, it will be subject to import VAT, in accordance with the European VAT Directive. This is the same as the treatment of all other third countries. On import to Ireland, VAT is charged at the standard rate, currently 23%, on the total of the customs value of the vehicle plus any applicable customs duty, and this must be paid prior to registration.
To import a vehicle from any third country into Ireland, a customs declaration must also be completed. Customs duty of 10% typically applies on the customs value of the vehicle.
However, the EU-UK Trade and Cooperation Agreement (TCA) has eliminated tariff duties for trade between the EU and Great Britain where the relevant rules of origin are met. If the goods are of UK origin, then a 0% customs duty rate applies. Under the terms of the TCA, goods of EU origin that were in use in the UK and that were subsequently imported into Ireland from Great Britain will not be eligible for the 0% tariff rate, as they will not qualify as UK origin. If a vehicle is of UK origin, it is important to note that the preferential tariff treatment must be claimed on import on the customs declaration.
Returned Goods Relief (RGR) provides relief from Customs Duty for cars which have been exported from the EU to a third country and re-imported into the EU, provided all the conditions for RGR are met. For example, where a car was manufactured in the EU, shipped to the UK and then exported from the UK to Ireland, it might be eligible for RGR if the conditions below are met. In very specific circumstances, relief from VAT on import may also apply where the car is re-imported into the EU by the same person that originally exported the car from the EU. The conditions for RGR are:
• The car must have been originally exported from the EU
• Must not have been altered and
• Must be re-imported within three years of export from the EU.
Rules on VAT and customs are typically determined at an EU level and are a consequence of the UK’s departure from the European Union. They are consistent with the treatment of other non-member third countries.
Vehicle Registration Tax (VRT) rates have remained very similar since the UK’s departure from the European Union, with slight increases in rates of VRT on passenger vehicles with higher emissions in recent years. VRT is charged in exactly the same way regardless of the place of origin of the vehicle concerned.