Change to the Tax Base
Current Tax Regime
Before 1 July 2008 VRT on passenger cars (category A vehicles) was charged as a percentage of the Open Market Selling Price (OMSP) of the car. The percentage is dependent on the engine size of the vehicle, with bigger cars paying a higher rate of VRT. All cars fitted into one of three rates as follows:
| Category | Engine Size | Rate |
|---|---|---|
| A1 | Cars up to 1,400cc | 22.5% of OMSP |
| A2 | Cars 1,401 to 1,900cc | 25% of OMSP |
| A3 | Cars over 1,900cc | 30% of OMSP |
A minimum of €315, was payable regardless of the VRT rate charged on a vehicle.
New Tax Regime
Since 1 July 2008, VRT payable on category A vehicles is no longer based on the engine size but rather on the level of CO2 emissions from the car. Linking the VRT rates to the level CO2 emissions means that individuals purchasing cleaner, low emission cars will pay less VRT while those opting to purchase higher emitting vehicles will pay more.
A seven-band CO2 emission system will applies. VRT is now charged as a percentage of the OMSP in accordance with the following table:
| CO2 Emissions (CO2g/km) | VRT Rates |
|---|---|
| 0 - 120g | 14% of OMSP |
| More than 120g/km up to and including140g/km | 16% of OMSP |
| More than 140g/km up to and including 155g/km | 20% of OMSP |
| More than 155g/km up to and including 170g/km | 24% of OMSP |
| More than 170g/km up to and including 190g/km | 28% of OMSP |
| More than 190g/km up to and including 225g/km | 32% of OMSP |
| More than 225g/km | 36% of OMSP |
The new system of taxation is applicable to new and imported category A vehicles.
As the new VRT rates differ from the current rates, the new regime is likely to impact on the VRT to be paid on all passenger cars registered after 1 July 2008. Thereafter, cars with lower CO2 emissions have their VRT rates reduced. Reductions can be expected across the range of lower emitting vehicles. At the other end of the scale, larger, luxury and high performance models with higher CO2 emissions are subjected to an increase in the VRT charged.
Implementation
New Vehicles
Before a new model is put on sale in Europe, it must undergo a series of tests to ensure that it has achieved approved standards regarding safety, environmental impact, etc. This process is called Type-Approval and each car achieving the approved standards is issued with a Certificate of Conformity. A distributor or main dealer must have a Certificate of Conformity for each vehicle that is sold. This certificate contains technical information about the vehicle, including information relating to the level of CO2 emissions. This level will determine the rate at which VRT will be charged. For customers who buy a car through a dealer or distributor, there will be no change in the registration procedures, as the car will be registered on their behalf by the dealer or distributor.
If a customer wishes to import and register a new car privately, then the level of CO2 emissions must be declared on the VRT3 form. The Certificate of Conformity showing the level of CO2 (located at point 46) must be presented with the VRT3 form at the time of registration.
Imported Second-Hand Vehicles
When an imported second-hand vehicle is presented for registration, the levels of CO2 emissions at the time of manufacture must be declared to Revenue on form VRT4 (the form used by an individual to register a second- hand car).
If the vehicle originated within the EU, the declaration must be supported by documentary evidence confirming the level of CO2 emissions of the vehicle to the satisfaction of Revenue.
Revenue will accept a range of documentation for this purpose. Among the documents deemed satisfactory at present are:
- the Certificate of Conformity (if it is available),
- a print-out from the Revenue ROS Enquiry System where the level of CO2 emissions is shown www.ros.ie
- evidence included on a previous registration document e.g. the UK V5,
- the level of CO2 emissions stated on a previous National Car Test performed elsewhere within the EU provided the CO2 stated is that given at the time of manufacture,
- a print-out for the vehicle from the DVLA
(Driver and Vehicle Licensing Agency) web site, www.vehiclelicence.gov.uk - a print-out from the VCA (Vehicle Certification Agency) web site
- a print-out from the SEI (Sustainable Energy Ireland) website
- a certificate from the manufacturer or main distributor stating the level of CO2 emissions.
If the vehicle originated in Japan, documentary evidence of the level of CO2 emissions will also be required.
The following documentation must be presented with the VRT4:
- Japanese Export Certificates or Japanese Certificates of Cancellation of Motor Vehicle Registration,
- a print-out from the Japanese Ministry of Land, Infrastructure and Transport showing the level of CO2 emissions for the model on the certificate.
Other non-EU Countries
If a vehicle originates in another non-EU country the following documentary evidence confirming the level of CO2 emissions is acceptable to Revenue.
- Evidence supplied on previous registration documents i.e. registration documents from Singapore,
- A document from the manufacturer stating the level of CO2 emissions at the time of manufacture,
- A Certificate of Conformity.
Other documentary evidence is currently being considered.
Second-hand Vehicles manufactured prior to 1997
In certain instances the level of CO2 emissions may not be available for vehicles manufactured prior to 1997. In such instances, if details of the fuel consumption of the vehicle are available - the combined figure derived from an average of urban and extra-urban figures (obtained from any of the Revenue approved sources only), the level of CO2 for the vehicle may be calculated using the formulae below.
It should be noted that all calculations using the formulae below must be carried out by the declarant in advance of the presentation of the vehicle at a Vehicle Registration Office (VRO).
- Metric Calculations:
- where fuel consumption is shown as litres per 100km:
CO2 emissions = fuel consumption X 23.20
Example
If the consumption is shown as 5.8 l/100km then 5.8 X 23.20 = CO2 emissions of 134.56 or 135 - where the fuel consumption is shown as litres per km:
CO2 emissions = fuel consumption X 2320
Example
If the consumption is shown as 0.0058 l/km then 0.058 X 2320 = CO2 emissions of 134.56 or 135 - where the fuel consumption is shown as kms per litre:
CO2 emissions = 2320/fuel consumption
Example
If the fuel consumption is shown as 17.2 km per litre then 2320 / 17.2 = CO2 emissions of 134.88 or 135
- where fuel consumption is shown as litres per 100km:
- Imperial Calculations
- where the fuel consumption is shown as miles per gallon the figure must first be converted to kms per litre as follows:
mpg/2.82485 = kms per litre
CO2 emissions are then calculated using the formula in 1(c) above.Example
If the fuel consumption is shown as 48.7 mpg then 48.7/2.82485 = 17.2 km per litre and 2320/17.2 = CO2 emissions of 134.88 or 135
- where the fuel consumption is shown as miles per gallon the figure must first be converted to kms per litre as follows:
Note: For diesel engines the multiplier changes from 2320 (or 23.20) to 2630 (or 26.30) whichever is appropriate.
All above documentary evidence must have English (or Irish) translations.
No Supporting Documentation
If a vehicle is registered without any supporting documentation VRT will be charged at 36%. Likewise, if for whatever reason, the supporting documentation fails to satisfy Revenue of the level of CO2 emissions for the vehicle, the 36% charge will also apply.
Such a charge is open to appeal through the VRT appeals process. Appeals must be lodged within two months of the payment of VRT. It should be noted that you cannot appeal a VRT charge unless the charge has been paid.
Hybrid, flexible fuel and electric vehicles
The relief of 50% reduction of the VRT payable on Hybrid and Flexi Fuel vehicles was withdrawn from 30 June 2008.
A VRT remission up to a maximum of €2,500 will be available on such cars registered between 1 July 2008 and 31 December 2010.
This relief is limited, on a sliding scale, depending on the age of the vehicle. The scale is as follows:
| Age of vehicle | Maximum amount which may be remitted or repaid |
|---|---|
| New vehicle, first registration | €2,500 |
| Not a new vehicle but less than 2 years | €2,250 |
| 2 years or over but less than 3 years | €2,000 |
| 3 years or over but less than 4 years | €1,750 |
| 4 years or over but less than 5 years | €1,500 |
| 5 years or over but less than 6 years | €1,250 |
| 6 years or over but less than 7 years | €1,000 |
| 7 years or over but less than 8 years | €750 |
| 8 years or over but less than 9 years | €500 |
| 9 years or over but less than 10 years | €250 |
| 10 years or over | Nil |
With effect from 1 January 2008 to 31 December 2010, series production electric vehicles and electric motor-cycles are exempt from VRT.
Vehicles covered by the remission/repayment
A hybrid electric vehicle is one that uses a combination of an internal combustion engine and an electric motor to derive its motive power. Hybrid electric engine technology benefits the environment by being more fuel-efficient than conventional internal combustion engines, emitting lower levels of harmful pollutants.
A flexible fuel vehicle (FFV) like any conventional petrol/diesel fuelled vehicle has a single fuel tank, fuel system and engine. However, the engine and fuel system are adapted to enable the vehicle to run on a combination of ethanol and petrol. To avail of the remission a vehicle must be a series production vehicle, i.e. not converted post-production; and must be capable of running on at least 85% ethanol and 15% petrol.
An electric vehicle is a vehicle that derives its motive power exclusively from an electric motor.
An electric motorcycle is a vehicle that derives its motive power exclusively from an electric motor.
Minimum Amounts
The minimum amounts of VRT that will be charged have also changed. Under the old scheme there was a minimum €315.00 charge for all cars regardless of the value. In recognition of the larger number of rates and the wider range from 14% up to 36% a limit for each CO2 band was introduced. The limits are:
| VRT Rate | Minimum VRT |
|---|---|
| 14% | €280 |
| 16% | €320 |
| 20% | €400 |
| 24% | €480 |
| 28% | €560 |
| 32% | €640 |
| 36% | €720 |
For each rate the limit reflects a car with a value of approximately €2,000.
There is no change for Category B (crew cabs, etc.), Category C (commercial vehicles) or Category M (motor-cycles – other than electric motor-cycles).