Vehicle Registration Tax

VRT

The duty of excise called Vehicle Registration Tax is charged and levied on the registration of a vehicle and on declarations of conversions. The tax is due on registration.  It may be paid by certain authorised persons such as manufacturers,

• importers
• persons who registers the vehicle,
• persons who convert it,
• persons who have in their possession a converted vehicle.

The duty of excise depends on the vehicle category and CO2 emissions stated.  Interest is charged on late payments.

Charge on Value

Vehicles in Category A and B are charged with reference to the value of the vehicle.  This is the open market vehicle /the selling price at the time of charging of tax.  Where a new vehicle on the date of the sale is supplied by a manufacturer or wholesale distributor, it must declare to the Revenue the price it may be recently expected to fetch in the State by retail.  This is deemed the open market value.  The Revenue may challenge the price as being too high or too low.

The open market selling price is inclusive of all taxes and duties, which would be determined as if it were on sale in the State following supply by a manufacturer or wholesale distributor in the State. In the case of a new vehicle, it means the price inclusive of all taxes and duties, which, in the opinion of the Revenue, quite reasonably be expected to be fetched on the first open arm’s length sale by the retail.

There should be included in the price, the value of enhancements and accessories not fitted at the time of the first registration but would normally be expected to be fitted or attached thereto or sold therefrom unless it is shown that they have not been removed for the purpose of reducing its open market selling price, and the value of those enhancements and accessories would not be taken into account in determining the open market price if it were a new vehicle above.

Categories

VRT Category A covers cars, including saloons, hatchbacks in estates, convertibles, MPVs, and minibuses with less than 10 permanently fixed seats.  The rate of charge is graded from 14% to 36% based on the level of CO2 emissions.  The rate is greater than 14 per cent or €280, at the lower level and 36% or €720, at the higher level.

Category B includes certain car-derived vans and jeep-derived vans.  The VRT applicable is 13.5% subject to a minimum of €124.

A motor caravan or a motor home must, be a Category M1, M2 or M3 vehicle under the classification.  It must be constructed to include living accommodation incorporating at least seats and table, sleeping accommodation, cooking and storage facilities and is charged at 13.5% of the open market selling price at the time of registration.

Category C includes larger commercial vehicles like agricultural tractors and buses with at least 10  seats, including the driver’s seat.  It includes N2, N3 and certain M2 and M3 vehicles under EU classification. It includes vehicles more than 30 years old at the time of registration.  They may be issued with a “ZV” license number.  The Vehicle Registration Tax for Category C vehicles is a flat rate of €200.

Vehicle D include ambulances, fire engines, and vehicles used for transporting road construction machinery.  The use of the vehicle is relevant to the classification.  There is a 0% VRT.

Motor-bikes, scooters, and all-terrain vehicles are charged with reference to the engine capacity.  The current rate is €2 for cc up to 350 and €1 thereafter per cc.  The total amount is reduced in accordance with a table taking account of the age of the vehicle.

This ranges from 10% for three months to one year, 20% for one or two years, 40% for two or three years, 50% for three to four years, 60% for four to five years, 70% for five to seven years, 80%  seven to 10 years, 90% 10 to 30 years and 100% for more than 30 years.

Reliefs

There are permanent reliefs for the following:

• where the vehicle is to the personal property of a private person being brought permanently into the State, where he is transferring his normal residence from outside the state into the state,
• being brought permanently into the state as part of the capital goods or other equipment of a business which  ceases activity outside the State and moves to carry on a similar activity within the State,
• the personal property of a deceased person brought permanently into the State by a person resident or body engaged in non-profit-making activity who either acquired it by her inheritance or who is the personal representative,
• given as a gift, token of friendship or goodwill by an official body, authority or group carrying out an activity in the public interest located outside the State to an official body, authority or group carrying out an activity in the public service or interest in the state and approved by the Commissioners,
• is in use by an official institution of the European Union,for personal use of the officials of staff of the EU,
  when supplied to persons under diplomatic, consular and similar arrangements, together with arrangements under various conventions establishing international bodies.

The reliefs in relation to the Disabled Drivers Tax Concessions Regulations applicable under the older legislation continue to apply.

Claiming Relief

The relief must be applied for and obtained from the Revenue Office.  It must be accompanied by the requisite documentation to prove exemptions. A number of exemptions and reliefs are available.  They include the following:

• Transfer of business,
• Transfer of business activity,
• Inheritance,
• Diplomatic.

Registration with Conditions

The Minister may authorise the  Commissioners to register vehicles subject to conditions, limitations, and restrictions as may be imposed either with or without payment of tax or at a lesser tax.

A vehicle may be registered subject to such conditions, limitations and restrictions as may be imposed without  payment of tax where the Commissioners are satisfied that it is used for certain purposes, including the

• establishment and maintenance of international air service,
• establishment of radio and meteorological services and other navigation aids.

Importer

Where dealers import vehicles, they are obliged to pay and account for the VRT.

The tax is based on the Open Market Selling Price (OMSP) of the vehicle.  Revenue calculate the tax.  An estimate is available on an online enquiry system operated by Revenue.

There is an appeal procedure if the applicant believes that the assessment of VRT is incorrect.  Evidence must be furnished of the requisite factors in terms of value etc.  If the car is not registered and VRT paid within 30 days, it must be removed from the State.

Once the VRT payment is made, a registration number is assigned by Revenue and issued by the NCTS centre.  It must be displayed in the vehicle within three days of issue.

A registration certificate is issued by the Department of Transport.  It is sent once the local motor tax has been paid to the local authority.

Hybrid / Electric

There is a repayment or remission of VRT for hybrid electric vehicles and flexible fuel vehicles.  Where they are registered between 1 January 2011 and 31 December 2013, they may qualify for remission or repayment up to €1,500.  The vehicles must be originally manufactured. A sliding scale applies, which depends on the age of the vehicle. That remission reduces to zero at year 10, stepping down from €1500 when new.

In the case of hybrid electric vehicles registered in that period, the maximum remission is €2,500 reducing to zero at year 10. A hybrid electric vehicle is a vehicle which derives its motor power from a combination of an internal combustion engine and electric motor and is capable of being driven on electric propulsion alone for part of its normal driving cycle.

A flexible-fuel vehicle is one that derives its power from an internal combustion engine using a blend of ethanol and petrol, with a minimum of 85% ethanol.

A plug-in hybrid electric vehicle is a vehicle that derives motor power from an electric motor and internal combustion, where the electric motor derives its power from a battery that may be charged from the engine and AC mains supply and is capable of being driven on electric propulsion alone for a material part of its normal driving cycle.

Category A or Category B electric vehicles, which are shown to be series production, i.e. originally manufactured models of electric vehicles, qualify for remission up to €5,000 , up to the end of 2013 on VRT.

Electric motorcycles were exempt until the end of 2013.

Finance Act 2019 amends Section 135C of the Finance Act 1992 by extending the VRT relief for hybrid electric vehicles and plug-in hybrid electric vehicles (PHEVs) until 31 December 2020. It also stipulates that hybrid electrics with CO₂ emissions in excess of 80 g/km and PHEVs with CO₂ emissions in excess of 65 g/km do not qualify for the VRT relief.

Finance Act 2021  46 amends section 135C of Finance Act 1992, which provides for the remission or repayment of vehicle registration tax on vehicles with certain fuel types. The remission provisions for electric vehicles are being extended to 31 December 2023.

Certificate of Conformity

All vehicles require a Certificate of Conformity for use in the EU.  The Certificate of Conformity and National Approval Certificate must be produced on registration.  The Type-approval can be obtained from the dealer or manufacturer and is generally given on purchase.

If the vehicle does not have type approval, it must be presented to the National Standards Authority of Ireland for certification.  The Certificate of Conformity should states the carbon emissions.

VAT

There are special VAT rules for motor vehicles.  A new means of transport is a goods or passenger vehicle that meets one of the two criteria:

• a new means of transport, if it is a motor vehicle or cycle supplied six months or less after the date of its first entry into service,
• a new means of transport if it travelled 6,000 kilometres or less at the time of first presentation.

Where it meets the above criteria, it is treated as a new means of transport, and VAT is chargeable. Entry into service means registration in another jurisdiction.  If not previously registered, the vehicle is new.

Where new or used vehicles are imported from outside the EU, VAT and customs duty is chargeable at the point of entry.  Proof must be presented to the NCTS Centre on registration.

Where a business which leases or hires vehicles or provides driving instruction is entitled to reclaim VAT an amount of the Vehicle Registration Tax chargeable may be refunded subject to conditions.  This is linked to the VAT element in the duty.

The Common Customs Tariff sets out the rates payable of customs duties on importation.

Vehicle Registration Tax Relief was extended to electric and hybrid electric vehicles until the end of 2016 by Finance Act 2014

Emission Charge

Finance Act 2019 amends Section 132 of the Finance Act 1992 by introducing a NOx charge which will become a component of the VRT chargeable on Category A vehicles (passenger cars and SUVs). The NOx charge will be calculated by reference to a vehicle’s NOx emissions as recorded on the certificate of conformity or the previous registration certificate. A new table has been added to section 132 outlining the rates applicable and with the charge applying cumulatively.

The NOx charge will be capped at a maximum of €4,850 for diesel vehicles and €600 for other vehicles.

Rates Amendments

Finance Act 2021  amends Finance Act 1992, which applies the VRT charging structure for Category A vehicles, which includes cars and SUVs. The VRT rates for Category A vehicles remain unchanged for low emission bands 1 – 8, with a 1 per cent increase between bands 9 – 12; 2 per cent for bands 13 – 15; and then a 4 per cent increase for vehicles that fall into bands 16 – 20.

This amendment comes into effect from 1 January 2022.