Enda Kenny (Mayo, Fine Gael)
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Question 252: To ask the Minister for Finance the range of duties and conditions that apply for the importation of new and second hand cars into the Republic from Great Britain and Northern Ireland; the number of motor vehicles imported in each of the past three years; the duties paid; and if he will make a statement on the matter. [13289/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am advised by the Revenue Commissioners that vehicle registration tax, VRT, may be payable on the importation of a vehicle from Great Britain and Northern Ireland into the State.

As a general rule, all vehicles imported permanently into the State from Great Britain and Northern Ireland or elsewhere must register for VRT purposes within one working day of their arrival in the State. However, in practice, Revenue allows latitude of a maximum of seven days for registration. VRT is payable on the open market selling price, OMSP, of the vehicle which is the expected retail price of the vehicle in the State, inclusive of all taxes. Cars such as saloons, estates, hatchbacks, convertibles, coupes etc., and minibuses with less than 12 permanently fitted passenger seats are classified as category A vehicles for VRT and as such are charged VRT based on the engine size of the car using the following calculation: less than 1400 cc at 22.5% of OMSP; from 1401 to 1900 cc at 25% of OMSP; and 1901 cc and over at 30% of OMSP, subject to a minimum payment of €315.00. Car derived vans and crew cabs of less than 3,500 kg gross vehicle weight are charged at 13.3% of OMSP, while commercial and agricultural vehicles pay a flat rate of €50.00 regardless of OMSP.

These calculations are used for both new and second-hand cars, so that the VRT payable is based on the OMSP of the car on importation into the State. The OMSP for new cars is determined by the main motor distributors while the OMSP of second-hand cars is determined by the Revenue Commissioners, based on market surveys, study of trade magazines, personal contact with the trade and other relevant material. While the statistics sought with respect to used cars are available, as those registering must declare previous country of registration, such a declaration is not included as part of the process with respect to registration of new cars and consequently the same data for new cars are not available. Revenue confirmed that 6,220 second-hand cars were imported from the UK in 2003, 10,641 in 2004 and 24,994 in 2005. Separately, Revenue confirms that 798 second-hand cars were imported from Northern Ireland in 2003, 1,513 in 2004 and 8,883 in 2005. Appendix 1 provides details of all new and second-hand vehicles imported into Ireland for the years 2003, 2004 and 2005. The Deputy may wish to note that VAT is chargeable at the rate of 21% of the invoice price, and is payable at the time of registration for VRT purposes, on all "new means of transport". A "new means of transport" for VAT is a vehicle that is supplied six months or less after the first date of entry into service and has travelled less than 6,000 km. VAT is not chargeable where a vehicle is not a new means of transport and is imported from within the EU.

We are aware that there has been a growth in the number of used cars purchased in the UK and Northern Ireland and imported into the State in recent years. However, from our perspective, the monetary benefits, if any, of pursuing this option may be negligible as the requirement to pay VRT on importation is aimed at reflecting the price of a similar car in Ireland, the purchaser is exposed to currency risks and long-term issues may emerge for the purchaser with respect to after-sales service.