Republic of Ireland in breach of EU law on VRT

IRL/GB

It has been found that Ireland has been in breach of EU law by charging the full vehicle registration tax (VRT) on vehicles entering the State on a temporary basis.

The ruling by European Court of Justice will be particularly felt on the Border where vehicles entering the Republic from Northern Ireland are routinely prosecuted for not paying VRT.

The Republic of Ireland has been charging the full VRT on vehicles brought into the country temporarily.

After the vehicle leaves the State, Revenue then refunds a certain portion of the VRT and charges an administration fee of €500.

According to the judgment by European Court of Justice: “The part exceeding the amount due for the period of use of the motor vehicle will constitute a tax levied in breach of EU law. Member states are required to repay, with interest, taxes levied in breach of EU law.”

The new judgement will ensure a fairer system, especially in Border regions.

“The core issue here is that Ireland will no longer be able to insist on the full payment of VRT when a vehicle from abroad is being used in the State on a temporary basis. This is a very significant change in how we apply our laws, and will ensure a fairer regime for citizens, particularly those living along the Border.

“It is also worth noting that the case in question involved vehicles that were leased or rented for a fixed period but the court took a wider view.

“It is quite clear that this will represent a very significant change in how we implement and police our legislation in regard to vehicles from abroad being leased in the State on a temporary basis.”

In 2016 alone, more than €1.5 billion was paid in total VRT and VAT from new and used car sales.

 

IRL/GB


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