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:
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)
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 at 23 per cent. 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, while camper vans are charged the same rate as a van.
There are some VRT exemptions. Hybrid cars get a €1,500 reduction in VRT, while plugin hybrids get €2,500 back (up to the end of 2018 anyway). Fully electric cars qualify for a €5,000 reduction, up to the end of 2021. Electric bikes are fully exempt.
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.
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.