Michael Noonan (Limerick East, Fine Gael)
Link to this: Individually | In context

Question 281: To ask the Minister for Finance the controls put in place by the Revenue Commissioners and the inspections carried out to ensure that cars being imported are valued at market value for the purposes of calculating Vehicle Registration Tax and that the value of extras are also taken into account;; and if he will make a statement on the matter. [20978/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

I am informed by the Revenue Commissioners that there is a range of controls and procedures in place to ensure that imported cars are correctly valued for Vehicle Registration Tax (VRT) purposes. Legislation provides that motor distributors declare their opinions of the market value, known as the open market selling price, of cars, and of extras, supplied by them. These distributor declarations are subject to checks by Revenue to ensure their accuracy. Chargeable extras are also required to be declared as part of the registration process and VRT audit guidelines identify the non-declaration of extras as a risk area to be managed.

Registrations of new cars imported for supply through the motor distributor and motor dealer network, being the vast majority of new car importations, are subject to importation inspection in many cases. Motor distributors and motor dealers are also subject to the audits and inspections applicable to all businesses on an ongoing basis. Second hand cars are charged by reference to Revenue's current determinations of market value. The data are validated on an ongoing basis in a number of ways, including by reference to trade publications, price lists, trader opinions, actual selling prices and information collected during the course of audits. In addition, Revenue maintains records, from information supplied by distributors, of the types and values of the chargeable extras available. Revenue is therefore in a position to validate the values of extras declared and also to establish the value of undeclared extras. The VRT mainframe computer system is also programmed to depreciate the values of extras for second hand cars.

Used cars, and new cars imported outside the franchised networks, are assessed for VRT and subject to controls at the time of their declaration for registration in the State. Chargeable extras are required to be declared as part of the registration process. All cars presented for registration at vehicle registration offices are liable to inspection. In administering this control system it is however necessary to strike a balance between addressing all potential risks to Revenue and providing a fast and efficient service to customers. Consequently, not all cars are physically examined. Selection for physical examination is made on the basis of certain criteria, relating essentially to the age and value of the vehicle. All cars below a certain age and above a certain value are required to be examined. In addition a proportion of lower value, older cars are selected for discretionary checks on a part risk analysis, part random, basis. The declaration or otherwise of extras is dealt with as part of such examination.

The Revenue Commissioners are satisfied that the control and inspection arrangements currently in place are adequate and appropriate and that they achieve a reasonable balance between the requirements of customer service and the prevention of VRT evasion.