Tuesday, 21 June 2022
Department of Finance
173. To ask the Minister for Finance if he has examined reducing VAT on imported electric vehicles; the estimated annual cost of reducing VAT on EVs to the lowest possible level; and if he will make a statement on the matter. [32389/22]
The VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In general, the EU VAT Directive provides that all goods and services are liable to VAT at the standard rate, currently 23% in Ireland, unless they fall within categories of goods and services specified in the Directive, in respect of which Member States may apply a lower rate or exemption from VAT.
Electric motor vehicles are not included in the categories of goods and services on which the EU Directive currently allows a lower rate of VAT or an exemption to be applied, and so they are liable to VAT at the standard rate, currently 23%.
I would like to advise the Deputy that the VAT collected on EVs was in the region of €70 million in 2021, and the VAT collected on EVs this year has been in the region of €73 million up to 31 May 2022. These estimated figures are based on Vehicle Registration Tax data relating to EVs.