Michael Healy-Rae
Ceist:329. Deputy Michael Healy-Rae asked the Minister for Finance if he will address a matter (details supplied) regarding VRT and VAT; and if he will make a statement on the matter. [42248/22]
Amharc ar fhreagraThursday, 8 September 2022
Ceisteanna (329)
Freagraí scríofa
All vehicles in the State must be registered, and Vehicle Registration Tax (VRT) generally becomes payable when a vehicle is first registered here. Typically, this occurs when a new vehicle is sold in the State, or when a vehicle is imported.
I am informed by Revenue that the VRT calculation on passenger vehicles is based on the Open Market Selling Price (OMSP) of the vehicle and its emissions levels, and the method of calculating VRT is the same, regardless of whether the passenger vehicle is new or has been imported second-hand, whether that be from another EU Member State or from a third country such as the UK.
In the case of a second-hand imported passenger vehicle, the OMSP is defined in law as the price, inclusive of all taxes and duties, for which, in the opinion of the Revenue Commissioners, the vehicle might reasonably be expected to sell in an arm’s length sale in the State by a retailer.
The amount of VRT on a passenger vehicle has two components, based on the vehicle’s carbon dioxide (CO2), and nitrogen oxides (NOx) emission levels. The CO2 component of the VRT charge is a percentage of the vehicle’s OMSP, ranging from 7% for a vehicle which has zero CO2 emissions, up to 41% of the OMSP for vehicles with the highest emission levels. The NOx component of VRT is calculated using a progressive scale, starting from €5 up to €25 per mg/km of the vehicle’s NOx emissions level. As a result of these calculations, the total VRT charge grows higher according to the emissions output of the vehicle involved and its market value. In general, the age of the vehicle is not a factor in the VRT calculation.
Changes to VRT were announced in recent Budgets, including the introduction of the NOx charge in 2020, and rate changes in 2021 and 2022. These changes are in line with the Government's Climate Action Plan commitments to decarbonise road transport.
Apart from the VRT arrangements, the Deputy will wish to note that, in accordance with EU law, vehicles imported from third countries are generally also subject to customs duties and VAT and that the rules in relation to customs duty and VAT on importation are established and agreed at EU level.
Since 1 January 2021, an import of a vehicle from Great Britain is an import from a non-EU country as a consequence of the UK’s departure from the EU. Importations of used cars from Great Britain, whether direct or indirect, are liable to VAT on importation, and customs duty, if applicable. These considerations would also contribute to the increased costs of a car import from the UK.
Revenue’s website provides information on calculating VRT and provides guidance for individuals who plan to import a vehicle from the UK.