Tuesday, 8 May 2018
Department of Finance
120. To ask the Minister for Finance if he is satisfied that the application of VRT on imported vehicles is fully in accordance with EU law in all respects; his plans to introduce changes to the regime; and if he will make a statement on the matter. [19771/18]
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”. VRT is a tax on the registration of a vehicle and is not a tax on the importation of a vehicle. Section 132(1) also specifies that the tax “shall be charged, levied and paid ... on ... the registration of a vehicle”.
Article 110 of the Treaty on the Functioning of the European Union (ex Article 90 TEC) provides that Member States cannot levy taxes that discriminate against imported goods or provide unfair protection to domestic goods. Over the years, the European Court of Justice, 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.
I am satisfied that the Vehicle Registration tax as a whole is compatible with the provisions of the Treaty on European Union and the Treaty on the Functioning of the European Union.
I will be introducing two significant changes to the VRT regime. The first of these will be implemented from 1 January 2019 and will address the ruling of the Court of Justice of the European Union of 19 September 2017 in respect of a proportionate payment of VRT on cars leased from other Member States (where the cars are only intended to be in the State for a temporary pre-determined period). The second will address the introduction of the Worldwide Light vehicle Test Procedure (WLTP) for CO2 emissions.