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. 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.
The vehicle must be presented at a National Car Test centre within 30 days of importation into Ireland.
Calculation
VRT is calculated as a percentage of the open market selling price of the vehicle. The OMSP is the "expected retail price" and includes all taxes previously paid in the state.
VRT rates pre-July 2008
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 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
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
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
Diplomats
Criticisms
Critics of VRT claim that it is effectively a continuation of the excise duty 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, 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 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 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, so it's also double taxing. Other European countries which have registration tax: Austria, Portugal, Greece, Norway and Iceland.
