Vehicle Registration Tax, or VRT, is a throwback to an Ireland that existed outside the EU, when protectionist tariffs were imposed on imports to try and give a boost to home-grown industries. It's why Ford was such a successful brand in Ireland for so many years, as it had its factory in Cork from 1917 to 1984. Other car makers got around these tariffs by setting up shop building cars from knock-down kits, including Toyota, Renault, Fiat, Austin-Morris and Volkswagen (which famously saw the first Beetle built outside of Germany put together in a big shed on the Shelbourne Road in Dublin). Eventually, though, the factories dwindled away, and the import tariff was re-named Vehicle Registration Tax to spare the government's blushes at EU meetings.
Since 2008, it too has been calculated on the basis of CO2 emissions, and it works like this (Note: the below table applies until 31 December 2020 only, see further down for the updated table):
Band A1: 0 - 80g/km 14 per cent of OMSP (minimum €280)
Band A2: 81 - 100g/km 15 per cent of OMSP (minimum €300)
Band A3: 101 - 110g/km 16 per cent of OMSP (minimum €320)
Band A4: 111 - 120g/km 17 per cent of OMSP (minimum €340)
Band B1: 121 - 130g/km 18 per cent of OMSP (minimum €360)
Band B2: 131 - 140g/km 19 per cent of OMSP (minimum €380)
Band C: 141 - 155g/km 23 per cent of OMSP (minimum €460)
Band D: 156 - 170g/km 27 per cent of OMSP (minimum €540)
Band E: 171 - 190g/km 30 per cent of OMSP (minimum €600)
Band F: 191 - 225g/km 34 per cent of OMSP (minimum €680)
Band G: over 225g/km 36 per cent of OMSP (minimum €720)
As part of Budget 2021, it was announced that a new VRT table would apply from 1 January 2021. It's also worth noting that if you are importing a car after that date, its CO2 rating will be 'uplifted' by a new formula devised by the government to align it with the WLTP regime. That uplifted CO2 rating should be used in determining the VRT band. See below for the new bands:
Band 1: 0 - 50g/km - 7% of OMSP
Band 2: 51 - 80g/km - 9% of OMSP
Band 3: 81 - 85g/km - 9.75% of OMSP
Band 4: 86 - 90g/km - 10.5% of OMSP
Band 5: 91 - 95g/km - 11.25% of OMSP
Band 6: 96 - 100g/km - 12% of OMSP
Band 7: 101 - 105g/km - 12.75% of OMSP
Band 8: 106 - 110g/km - 13.5% of OMSP
Band 9: 111 - 115g/km - 14.25% of OMSP
Band 10: 116 - 120g/km - 15% of OMSP
Band 11: 121 - 125g/km - 15.75% of OMSP
Band 12: 126 - 130g/km - 16.5% of OMSP
Band 13: 131 - 135g/km - 17.25% of OMSP
Band 14: 136 - 140g/km - 18% of OMSP
Band 15: 141 - 145g/km - 19.5% of OMSP
Band 16: 146 - 150g/km - 21% of OMSP
Band 17: 151 - 155g/km - 23.5% of OMSP
Band 18: 156 - 170g/km - 26% of OMSP
Band 19: 171 - 190g/km - 31% of OMSP
Band 20: greater than 191g/km - 37% of OMSP
That OMSP is the Open Market Selling Price, or in other words, what the Revenue Commissioners judge the Irish market value of your car to be. So if you're importing a car, you're not paying the VRT on the price you paid, but on the price you would have paid had you bought the car in Ireland. For a new car being brought in by a car maker, the OMSP is essentially the invoice price for the car, including VAT and the VRT. So yes, you're paying a tax on a tax, there.
For commercial vehicles, VRT is calculated at 13.3 per cent of the OMSP, while for agricultural vehicles, larger commercials and HGVs, it's a flat €200 rate. Bikes pay a weird €2 per engine cc.
Of course, there was a big change from 2020 and that’s the introduction of the new additional VRT charge based on the NOx emissions (called a NOx levy) of a car either being bought new or imported as a used vehicle.
The charge works on a sliding scale and is calculated on the emissions of NOx (oxides of nitrogen, the gases that can cause respiratory illnesses and which have been at the heart of the 2015-on diesel emissions scandal) as measured in milligrams per kilometre. So, up to 60mg/km, you’ll pay €5 per mg (that adds up to €300). From 61mg/km to 80mg/km you’ll pay €15 per mg (which adds up to €285). Above 80mg/km, you’ll pay a whopping €25 per mg. Note: this scale is changing slightly from 1 January 2021. From that date it will be €5 per mg for up to 40mg/km, €15 per mg for 41-80mg/km and €25 per mg above that.
Now, for new cars and for most relatively recent imports, that’s not going to be a major problem. For new cars, the average NOx emissions stand at around 43mg/km, so you’ll only pay about an extra €215 for your new car. Diesel cars are always worse off than petrol cars when it comes to NOx, and this tax is clearly aimed at discouraging people from bringing older, more polluting diesel models in from the UK. The effect is stark on older models, right enough, with many popular cars attracting NOx tax charges of more than €2,000. There is a maximum limit for NOx tax, but it’s a huge €4,850 for diesel-engined cars (but just €600 for petrol or hybrid cars). Don’t forget - the NOx tax is ON TOP OF THE NORMAL VRT CHARGE, not instead of it. It’s going to make importing older diesel cars hugely expensive, but then that’s kind of the point.
There are some VRT exemptions. New hybrid cars get a €1,500 reduction in VRT if their emissions is under 81g/km, while new plug-in hybrids get €2,500 back (up to the end of 2020 anyway) if their emissions is less than 66g/km. Used hybrids can avail of VRT reductions (if their emissions are low enough) on a sliding scale depending on age. Fully electric cars qualify for a maximum €5,000 VRT reduction, up to the end of 2021. Electric bikes are fully exempt until then as well.
Other exemptions include those importing a car they already own when changing address to move to Ireland, but you need to have a lot of paperwork in order for that, including proof of at least six months' insurance and tax.
You only have to pay VAT when importing a new car, though, or at least new-ish. Anything that's older than six months, or has done more than 6,000km and has had its VAT previously paid in another EU state is VAT exempt at the point of import.
Oh, and there’s good news for those looking to import either a classic car or a motorhome/camper. Classics (which is defined as any vehicle older than 30 years) fall into category C, which means a flat-rate payment of €200 (buses and big trucks and hearses also fall into that category), while motorhomes come under category B, the same as commercial vehicles, so you pay 13.3 per cent of the Irish open market value.
Hope that all helps understand the Irish motor VRT system, but if you have any specific questions we've not covered, or you'd like us to help you calculate VRT due on a car, feel free to drop us a question via the Ask Us Anything page.