John Deasy (Waterford, Fine Gael)
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Question 554: To ask the Minister for Finance the reason the purchase price of vehicles bought in other EU countries is not accepted by his Department as the value of imported vehicles when vehicle registration tax is being calculated for such vehicles; and if he will make a statement on the matter. [30159/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am advised by the Revenue Commissioners that Vehicle Registration Tax (VRT) is charged on the open market selling price (OMSP) of a vehicle in the State.

OMSP is defined in Section 133 of the Finance Act 1992 and is the price inclusive of all taxes and duties which a vehicle may reasonably be expected to fetch on a first arm's length sale in the open market in the State by retail.

The OMSP of new vehicles in the State is declared to the Revenue Commissioners by a wholesale distributor, while the OMSP of imported second hand vehicles is determined by the Revenue Commissioners based on factors such as age, mileage and vehicle condition.

EU Member States are entitled under EU law to charge National taxes provided that such taxes are applied equally to imported and indigenous goods. In this regard, VRT complies with EU law in that the VRT charged on a vehicle imported into the State is equivalent to the amount of residual VRT contained in a similar Irish vehicle which is registered in the State.

Accordingly, in order to provide the same tax base for the application of the tax on the registration of vehicles sourced both in the State and abroad, VRT is charged on the OMSP of the vehicle and not on the purchase price of vehicles bought in other EU countries.