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Some Irish consumers choose to import cars from other Member States. The import market has been fruitful for bargain hunters and car enthusiasts alike. There are a number of reasons for choosing to import a car over buying one from an Irish dealer. Many buyers are attracted by the price of cars in other countries. It appears that higher spec vehicles are available at lower prices in the UK and on the continent. Though Ireland has a lucrative motor market, the choice and range of cars available to those who can opt to import is far greater. This choice ranges from new, used and vintage cars.
Vintage car buyers are looking for particular models, years and specs. Their reasons for importing cannot be met in the Irish market. All in all, there are many reasons a consumer seeks to search abroad, but will the new VRT system hinder or help those consumers? Vintage cars will continue to have the flat rate of €50 applied to them by the way. Current VRT system in Ireland
Under the current system of VRT, any vehicles that are imported from outside of the country must be registered with the Revenue Commissioners. This must be done before the end of the next working day of arrival in the Republic. If the vehicle is from another Member State and is less than six months old, VAT of 21% will be charged on it even if proof is given of VAT being charged in the country of origin. Regardless of age, if the vehicle is being imported from outside the EU, VAT will be charged at entry. On top of that, VRT will be charged depending on the use and engine size of the vehicle. This is to register the vehicle, making it legal to drive within Ireland. New VRT system in Ireland
Under the new system, which will be implemented from 1st July 2008, VRT will be charged on the basis of CO2 emissions. This is to be applied to all cars registered in Ireland, including imported second hand cars. New and used unregistered cars that are imported into the country after this date will be subject to the new Motor Tax and new VRT system. Imported used cars will be treated under the new VRT system of emissions according to the Revenue. An email from a reader on 29/04/08. Dermot confirmed with Revenue Revenue tell me that all cars whether new or second hand etc will be charged vrt according to emissions
The current rules for VAT apply, but the rate at which VRT is charged will differ. The seven rates that apply will range from 14% to 36% of the OMSP, depending on the emission level of the car.
Since 2001, under European law each manufacturer must produce a Certificate of Conformity with each car model. In this certificate the level of CO2 emitted by the model will be recorded. The Revenue Commissioners will use this certificate to determine the VRT rating of new imported cars.
Irish consumers who choose to import cars are subject to both VAT and VRT. Even considering that VAT may have already been applied in the country of origin, the importer must pay it again on arrival in the Republic. On joining the EU, Ireland agreed to the free movement of goods across member states. This VAT is a form of double tax, and disadvantages the Irish importer. The current system in place means that any bargain found in the UK or elsewhere is mostly lost on the import into the country. Irish citizens are not benefiting from the rights of other Europeans. There are still trade borders between Ireland and the rest of the EU, particularly when Irish citizens try to benefit from our apparent open market.
Using the current system of VRT and Motor Tax, based on engine size, importing a Citroen C5 could set you back £20,411 (€25,778). That is calculated on a vehicle bought in the UK at £13,495 (€17,043). As it is new, VAT of 21% must be paid on arrival, bringing the cost up to £16,328 (€20,622). With an engine size of 1.6ltrs, VRT is applied at 25%, leaving the total cost at £20,411. Once the car is registered and legal to drive, Motor Tax will be apply each year, and with this size engine the annual charge is €453.
Now if we take the same car, bought at £13,495 (€17,043) and apply the new system we can shave a few thousand off the end price. Adding the VAT, we are back up at £16, 328 (€20,622). As the C5 only emits 139g/km, VRT is only 16% and bringing the end price up to £18,941 (€23,922). On top of that, due to the low emission rating, Motor tax is only €150 a year. Importing a vehicle with low emissions can greatly reduce costs, and considering the C5 is currently selling for €32,000 in the Republic, the difference is dramatic.
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