Written answers

Thursday, 30 November 2006

Department of Finance

Vehicle Registration Tax

6:00 pm

Photo of Paul KehoePaul Kehoe (Wexford, Fine Gael)
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Question 72: To ask the Minister for Finance the reason VRT at 13.3% is calculated on motor homes imported here valued at €40,000 even though it value price is less; his plans to change the VRT on motor homes imported here; the reason a motor home that weighs over 3000kg only has a charge of €50; if this taxation charge applies to Irish citizens to promote a single market approach to trade; and if he will make a statement on the matter. [41001/06]

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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I am advised by the Revenue Commissioners that Vehicle Registration Tax (VRT) is assessed on the open market selling price (OMSP) of a vehicle in the State and is defined in Section 133 of the Finance Act 1992 as the price inclusive of all taxes and duties which, in the opinion of the Revenue Commissioners, the vehicle might reasonably fetch on a first arm's length sale in the open market in the State by retail. (Any person who has paid or is liable to pay VRT may appeal to the Commissioners against the amount of tax charged.).

Section 130 of the Finance Act 1992 provides the definition of a motor home or motor caravan (as they are referred to in VRT legislation) for VRT purposes. Motor caravans with an unladen weight of not more than 3,000 kilograms are classified as category B — attracting a VRT rate of 13.3% of their OMSP in the State. Motor caravans with an unladen weight in excess of 3,000 kilograms are classified as category C attracting a flat rate of VRT of €50.

Motor caravans with an unladen weight of not more than 3,000 kilograms have the potential to be used as car substitutes and this is reflected in their intermediate category B VRT classification. Heavier caravans in excess of 3,000 kilograms are unlikely to be used as car substitutes and are, therefore, afforded category C classification.

VRT is payable by all individuals (Irish nationals and non-nationals) on the registration of vehicles in the State. Finally, EU Member States are entitled to impose National taxes provided that there is no discrimination against imported goods in favour of indigenous goods. In this regard VRT is a National tax in Ireland and does not contravene EU law in that the VRT payable on registration of an imported vehicle is equal to the amount of residual VRT contained in a similar vehicle already in the State.

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