Brendan Griffin (Kerry, Fine Gael)
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283. To ask the Minister for Finance if he will provide clarification on a matter (details supplied); and if he will make a statement on the matter. [51535/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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Revenue informs me that there are a number of factors that influence the cost of importing a vehicle from Northern Ireland including the value of the vehicle and its emissions.

There are three areas which need to be considered as costs of importing a vehicle into the State from Northern Ireland. These are Vehicle Registration Tax (VRT), Value-Added Tax (VAT) and Customs Duty.

1. VRT

For the purposes of this reply, we will assume the Deputy’s question is in relation to Category A vehicles, the VRT category into which cars for everyday family use normally fall into. The origin of the car has no implication whatsoever for VRT calculations.

I am informed by Revenue that the VRT calculation on passenger vehicles is based on the Open Market Selling Price (OMSP) of the vehicle and its emissions levels.

In the case of a second-hand imported passenger vehicle, the OMSP is the price, inclusive of all taxes and duties, for which, in the opinion of the Revenue Commissioners, the vehicle might reasonably be expected to sell in an arm’s length sale in the State by a retailer.

The amount of VRT on a passenger vehicle has two components, based on the vehicle’s carbon dioxide (CO₂), and nitrogen oxides (NOx) emission levels. The CO₂component of the VRT charge is a percentage of the vehicle’s OMSP, ranging from 7% for a vehicle which has zero CO₂emissions, up to 41% of the OMSP for vehicles with the highest emission levels. The NOx component of VRT is calculated using a progressive scale, starting from €5 and rising to €25 per mg/km of the vehicle’s NOx emissions level. As a result of these calculations, the total VRT charge grows higher according to the emissions output of the vehicle involved and its market value.

2. VAT

A vehicle may be subject to VAT. Vehicles first registered in Great Britain (GB), and subsequently registered in NI after 31 December 2020, will be subject to VAT at a rate of 23% of the customs value of the vehicle (the cost price plus the costs of transport and insurance) before it may be registered in the State. If it can be shown that a vehicle has remained in Northern Ireland since first registration, or was in Northern Ireland prior to 31 December 2020, VAT will not apply as Northern Ireland remains within the European Union’s (EU) VAT regime.

3. Customs Duty

Cars purchased from Northern Ireland are not normally subject to customs formalities including declarations or payment of customs duty. However, proof will be required to be provided to Revenue to show that the vehicle was brought into Northern Ireland prior to 1 January 2021, or, in the case of vehicles imported to Northern Ireland after 1 January 2021, proof that the customs formalities were completed in Northern Ireland.

A vehicle first registered in NI after 1 January 2021 can be registered in the State without providing proof of its customs status where it meets the following conditions:

- the registration in NI was the first registration of the vehicle in the United Kingdom (UK)

and

- the vehicle has never been exported and, or re-registered in, Great Britain or any other country outside the European Union.

Additional information can be found on the Revenue website at the following link: revenue.ie/en/importing-vehicles-duty-free-allowances/guide-to-vrt/registration-of-imported-used-vehicles/index.aspx.