Pearse Doherty (Donegal, Sinn Fein)
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376. To ask the Minister for Finance if he will consider reducing the rate of vehicle registration tax on cars imported from the UK to offset post-Brexit VAT changes that will apply to second-hand cars imported from the UK; the estimated cost increase in respect of such a car with an open market value of €20,000 as a result of these changes; and if he will make a statement on the matter. [3388/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy will be aware, the impact of the UK now being a 3rd country for Customs purposes has impacted on costs of imports, including cars, from Great Britain. There has been an extensive communications and awareness campaign to communicate this to motor dealers and private individuals. The Revenue Commissioners have advised that the Revenue website alerts customers who are importing used cars from Great Britain after 31 December 2020 that they should factor in increased costs due to VAT at import and customs duty if applicable. It would be neither feasible nor appropriate to attempt to offset any Brexit related cost increases on the importation of cars from Great Britain by reducing Vehicle Registration Tax (VRT) rates for those vehicles.

Customs duties are calculated based on the price paid for the car and any other handling and transport costs. VAT is calculated on the customs duty inclusive amount. It is important to note that the Open Market Selling Price (OMSP) has no bearing on the amount of customs duty or VAT payable on importation into the State. The customs duty and VAT payable on a car imported from Great Britain, with an import value of €20,000, would depend on the origin of the car.

The table below details the rates of Customs Duty and VAT payable on cars imported from Great Britain depending on their origin.

A car with an import value of €20,000 imported from Great Britain but originating in a third country, or in the EU, would attract €7,060 in customs duty and VAT.

Imported cars must be registered in the State within 30 days. Before a vehicle is presented for registration the relevant customs and VAT obligations on importers of cars from Great Britain will need to have been met. At registration the amount of VRT due is calculated based on the OMSP of the vehicle and other factors including the age of the vehicle and its Carbon Dioxide (CO₂) and Nitrogen Oxide (NOx) emissions. The OMSP for the most common vehicles, and estimate of the tax due, can be found via the VRT calculator on the Revenue website. There is no provision to provide different VRT rates on the basis of the previous ownership of the vehicle.