Vehicle Registration Tax
Encyclopedia
Vehicle registration tax or VRT is a tax that must be paid in Ireland when registering a motor vehicle.
The tax is paid to the Revenue
in two ways:
The vehicle must be presented at a Revenue Vehicle Registration Office (VRO) no later than one day after arrival into Ireland.
In addition, Motor Tax Rates have been realigned to reflect these new VRT bands with the motor tax payable being linked to the VRT band.
law. It should also be noted that as it is calculated on the selling price of a vehicle, inclusive of VAT, so is in effect a double taxation. Along with complaints about the very high rate of tax, critics maintain the tax is ineffective in one of its stated aims the reduction of pollution from vehicles because while it may limit the number of vehicles on the road (by making new cars less affordable), it provides a disincentive for owners of older (more polluting) vehicles to replace their cars. As the tax is on vehicle ownership rather than usage (Ireland's rates of taxation on petrol and Diesel are fairly low by European standards) there is little incentive for those who do manage to buy a car to ever consider using less polluting methods of transport.
Finland also operates a system which charges a separate vehicle tax in addition to VAT. This system has also attracted controversy. The due the a heavy car tax , the cars is oldest of Europa and death rate is highest in the Scandinavian. The government is also sensurates the writing of car taxes. The system is unlegal in the Eu.
The tax is paid to the Revenue
Office of the Revenue Commissioners
The Office of the Revenue Commissioners , - now called simply Revenue - is the Irish Government agency responsible for customs, excise, taxation and related matters...
in two ways:
- VRT is included in the retail price of a new motor vehicle purchased from a dealership
- The tax is paid by the owner of a motor vehicle imported from abroad upon applying for registration (subject to exemptions, below).
The vehicle must be presented at a Revenue Vehicle Registration Office (VRO) no later than one day after arrival into Ireland.
Calculation
VRT is calculated as a percentage of the open market selling price (OMSP) of the vehicle. The OMSP is the "expected retail price" and includes all taxes (Including VAT) previously paid in the state.VRT rates pre-July 2008
| Vehicle | Engine Size | VRT |
|---|---|---|
| Cat. A: Cars | < 1400 cc | 22.5% of OMSP, (subject to a min. tax of €315) |
| Cat. A: Cars | 1401-1900cc | 25% of OMSP (subject to a min. tax of €315) |
| Cat. A: Cars | > 1900cc | 30% of OMSP (subject to a min. tax of €315) |
| Cat. B: Car-based commercial vehicles | N/A | 13.3% of OMSP (subject to a min tax of €125) |
| Cat. C: Commercial vehicles | N/A | A flat rate of €50. |
| Cat. D: Emergency and construction vehicles | N/A | N/A |
| Hybrid vehicles | as per cars | 50% of VRT payable may be rebated in respect of some hybrid vehicles. |
Current VRT rates
A new system was introduced with effect from the 1st July 2008. This system moved the VRT calculation for passenger vehicles from being calculated on engine capacity to a system calculated on CO2 Emissions. This system applies to new vehicles registered from this date as well as second hand vehicles imported after this date. Commercial Vehicles remain unaffected.| Band | CO2 Emissions | VRT Rate |
|---|---|---|
| A | 0 – 120g | 14% of OMSP |
| B | 121 – 140g | 16% of OMSP |
| C | 141 – 155g | 20% of OMSP |
| D | 156 – 170g | 24% of OMSP |
| E | 171 – 190g | 28% of OMSP |
| F | 191 – 225g | 32% of OMSP |
| G | 226g and over | 36% of OMSP |
In addition, Motor Tax Rates have been realigned to reflect these new VRT bands with the motor tax payable being linked to the VRT band.
Exemptions
- Disabled Drivers or Disabled Passengers who have been certified eligible and purchase vehicles modified for their use.
- Temporary or new residents who have previously registered their vehicle abroad for more than six months (and are additionally prevented from selling their vehicle for twelve months after moving to Ireland)
- Diplomats
Criticisms
Some critics of VRT claim that it is effectively a continuation of the excise duty (which was applicable to vehicles in Ireland prior to 1992) and as such is illegal under European unionEuropean Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
law. It should also be noted that as it is calculated on the selling price of a vehicle, inclusive of VAT, so is in effect a double taxation. Along with complaints about the very high rate of tax, critics maintain the tax is ineffective in one of its stated aims the reduction of pollution from vehicles because while it may limit the number of vehicles on the road (by making new cars less affordable), it provides a disincentive for owners of older (more polluting) vehicles to replace their cars. As the tax is on vehicle ownership rather than usage (Ireland's rates of taxation on petrol and Diesel are fairly low by European standards) there is little incentive for those who do manage to buy a car to ever consider using less polluting methods of transport.
Other countries
Similar taxes are in place are the Netherlands which has the BPM (Belasting Personenauto’s Motorrijwielen) tax. This tax is 45% of the selling price of the car and gives a discount or punishment based on the CO2 emission. The tax is supposed to disappear by 2018, but the government has said it would introduce a similar tax but then solely based on CO2 emissions.Finland also operates a system which charges a separate vehicle tax in addition to VAT. This system has also attracted controversy. The due the a heavy car tax , the cars is oldest of Europa and death rate is highest in the Scandinavian. The government is also sensurates the writing of car taxes. The system is unlegal in the Eu.