Written answers

Tuesday, 3 November 2015

Department of Finance

Vehicle Registration

Photo of Tony McLoughlinTony McLoughlin (Sligo-North Leitrim, Fine Gael)
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308. To ask the Minister for Finance if Ireland's vehicle registration tax measures infringe upon a number of European Union laws (details supplied); and if he will make a statement on the matter. [37814/15]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners that section 132(1), Finance Act, 1992 provided for the introduction, from 1 January 1993, of "a duty of excise, to be called vehicle registration tax".

Article 110 of the Treaty on the Functioning of the European Union (TFEU) (ex Article 90 TEC) provides that Member States may not impose on the products of other Member States any internal taxation in excess of that imposed directly or indirectly on similar domestic products.  Over the years, the Court of Justice of the European Union, in a number of opinions and rulings, has stated that the charging of a tax such as VRT is within the competence of a Member State provided that it does not breach Article 110 of the TFEU.

Article 26 of the TFEU  (ex Article 14 TEC) provides that the European Union shall adopt measures with the aim of establishing the functioning of the internal market. Article 30 of the TFEU  (ex Article 25 TEC) provides that customs duties on imports and exports and charges having equivalent effect shall be prohibited between Member States.

Prior to 1 January 1993, Motor Vehicle Excise Duty (MVED) was levied on a motor vehicle upon manufacture and release for purchase in the State or upon importation into the State. Following the signing of the Maastricht Treaty, considerable reform of Ireland's excise duty regime was undertaken to ensure the compatibility of all excise duties with European Union law. As part of this reform, the MVED, which could have been held to be incompatible with what were then Articles 18 and 25 TEC, was replaced with VRT, which is compatible with European Union law.

I am satisfied that VRT is compatible with the provisions of the Treaty on European Union and the Treaty on the Functioning of the European Union, including those provisions relating to the free movement of goods and services. 18 of the 28 Member States of the European have a form of Vehicle Registration Tax.

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