Vehicle registration tax (Ireland)
Vehicle Registration Tax or VRT is a tax that is chargeable on registration of a motor vehicle in Ireland.
Every motor vehicle brought into the country, other than temporarily by a visitor, must be registered with Revenue and must have VRT paid for it by the end of 30 days of arrival in the country.[1]
The tax is paid to the Revenue 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 National Car Test centre within 30 days of importation into Ireland.[2]
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 | (Pre 2011: €50 flat rate). Post 2011: 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 1 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 (originally registered after this date) imported after this date. Commercial Vehicles remain unaffected. The rates have been updated however as of 1 January 2013.
VRT Rates as of 1 January 2013
| Band | CO2 Emissions (/km) | VRT Rate |
|---|---|---|
| A1 | 0 – 80g | 14% of OMSP |
| A2 | 81 – 100g | 15% of OMSP |
| A3 | 101 – 110g | 16% of OMSP |
| A4 | 111 – 120g | 17% of OMSP |
| B1 | 121 – 130g | 18% of OMSP |
| B2 | 131 – 140g | 19% of OMSP |
| C | 141 - 155g | 23% of OMSP |
| D | 156 - 170g | 27% of OMSP |
| E | 171 - 190g | 30% of OMSP |
| F | 191 - 225g | 34% of OMSP |
| G | 226g and over | 36% of OMSP |
VRT Rates Before January 2013
| Band | CO2 Emissions (/km) | 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
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 union law. They also say that as it is calculated on the selling price of a vehicle, inclusive of VAT and VRT, it is in their view a double taxation. Critics also claim 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 also may provide a disincentive for owners of older, more polluting vehicles to replace their cars with newer, less polluting ones. As the tax is on vehicle ownership rather than usage, critics also claim that there is less incentive for those who do manage to buy a car to consider using less polluting methods of transport.
Other countries
A similar tax is in place in the Netherlands with the BPM (Belasting Personenauto’s Motorrijwielen) tax. This tax is based on the CO2 emission of the specific car. The average tax amount per vehicle in the Netherlands is €2,700.
Finland also operates a system which charges a separate vehicle tax in addition to VAT. This system has also attracted controversy, due to what some consider a "heavy" car tax. Finnish cars are the oldest in Europe and the death rate is highest in Scandinavia. The government also saturates the writing of car taxes.
Denmark has the highest vehicle tax in Europe (the second heaviest in the world after Singapore). The tax is 105% of the first DKK 81,700 and 150% of the rest, down from 180%, as of 20 November 2015. The tax is calculated after the VAT (25%), so it's also double taxing. [3]
Other European countries which have registration tax: Austria, Portugal, Greece, Norway (high, similar to Denmark) and Iceland.