# VRT Calc - Double Taxation?



## sonnyikea (16 Nov 2006)

I searched the forums but could not find an answer - I wondered if anyone knows if the VRT calc, specifically based on the OMSP values, on secondhand cars is a double taxation. I was in the VRO the other day and asked the question and could not get a definate answer. They are looking to find out the answer for me but I wondered if anyone knew?

For example on my car the OMSP is around 12k. They add on 30% VRT 3.6k. Is my car then worth 15.6k? The VRO seemed to think that my car was only worth 12k. Which would be a double taxation in my book as the 12k OMSP already accounts for the VRT that would have been paid on the same type of car when new.

Surely the OMSP should be the new car price without VRT but with VAT and other taxes applied, minus the yearly depreciation? 

If it is a double taxation how would one go about contesting this?


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## ajapale (16 Nov 2006)

sonnyikea said:


> If it is a _double taxation_ how would one go about contesting this?



Im not entirely sure what you mean by "_double taxation_" but I dont think any such principle is enshried in our leglisation or tax code in this country.

There was a discussion on "_double taxation_" here a few years ago, if I find it Ill post the link here.


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## grahamo (16 Nov 2006)

your spot on. I've just realised it. The OMSP they quote includes the value of VRT on the price of a car here.


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## sonnyikea (16 Nov 2006)

By double taxation - I mean does VRT exist in the OMSP. The OMSP price is derived from a number of means but ultimately is the price I would expect to pay on a dealers forecourt for the exact same car. Does this price include VRT which was paid when the car is new? Am being charged VRT on that price, hence my 'double taxation' question?

If, however, the OMSP is the value I would pay on a dealers forecourt minus the VRT percentage then it is a single taxation.

Maybe double taxation is the wrong terminology, I'm trying to work out if the OMSP is calculated incorrectly by already including an element of VRT.

I'd apppreciate the post if you come across it. The only mention I could find was VRT on top of VAT which was thought of as a double taxation.

Edit: I had the same issue with someone selling me something at cost. They told me to pay 30% of the cost of the item which included VAT and then to add 21% VAT on to that figure. I tried to explain that the 30% had an element of VAT in it and the final figure would have had two lots of VAT in it. They should have taken 30% of the ex VAT selling price and then added the 21% VAT onto that but he didn't understand me.


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## RS2K (16 Nov 2006)

There is also a double tax hit as the VRT is on the VAT inclusive price on a new car.

Tax on tax. it's sickening and expensive.


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## ajapale (16 Nov 2006)

RS2K said:


> Tax on tax. it's sickening and expensive.


Agreed, but I dont think that there is any regulation or code which outlaws the practice.


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## RonanC (16 Nov 2006)

30% of 12k is €3600. 

If you buy a car from UK they take it that you didnt pay 12k for the car. The Open Market Selling Price in Ireland includes, VAT, VRT and any other import duties. 

So what they do is get the OMSP for your car and then calculate the VRT based on that. Then charge you the VRT which in this case is €3600. How much did you pay for the car in the first place??


if you end up paying more than the OMSP for the car (which includes buying from UK, adding VRT and so on and this ends up being more than the OMSP they give you then challenge this)


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## sonnyikea (16 Nov 2006)

I found this thread which is on a similar vein but doesn't give any indication as to the calc for OMSP: http://www.askaboutmoney.com/archive/index.php/t-18326.html

Ronan - is that how the calc is supposed to work? The OMSP is slightly more than I paid for the car so with the VRT added it takes this way over. Are these grounds for appeal based on an incorrect OMSP?

From what you say the value includes VRT, so I am paying a figure of VRT which is based on an already assumed VRT payment which surely cannot be right. How does one go about escalating this? EU Commission?


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## sonnyikea (16 Nov 2006)

I also found this: http://www.courts.ie/judgments.nsf/...6dbe0c85d63b6a6780257156003a1408?OpenDocument

an extract of which is below:

_As to how the OMSP of a used vehicle is arrived at, what is disclosed is that the second defendant takes the OMSP of the new equivalent as a benchmark. It then allocates a valuation depreciation category from 23 depreciation tables, which are drawn up to reflect the realities of the market. In each case the choice of benchmark and of valuation depreciation category is made by an officer of the second defendant who allocates a specific statistical code. This information is then inputted to a computer database maintained by the second defendant. This exercise will prompt an OMSP reflecting market conditions. The system also allows for reductions in the OMSP to compensate for excessive mileage and poor condition._


So does the OMSP of the new car include the VRT amount? Depends on whether VRT is classed as a tax or duty?

_VRT is charged on the open market selling price (OMSP) of the vehicle. In the case of a used vehicle the OMSP is the price, inclusive of all taxes and duties which the vehicle might reasonably be expected to fetch on a first arm’s length sale thereof in the State by retail._


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## RonanC (16 Nov 2006)

OMSP is based on the average selling price of that model car in this country, based also on milage, spec and so on. 

If the price of the car goes up in some garages then VRT will usually also go up.


If i buy a car from UK for €6000, i will pay VAT for it in UK. When i bring it home I have to by IRISH law (and totally against EU law) pay VRT on the car to get it registered as an irish car. VRT can vary between about 20-35% of the OMSP of the car here in Ireland, not the actual value you paid. 

If the car sells in Ireland for €12000, then i pay €3600 to Revenue for the privilage of having Irish reg plates. 

This now brings the total i have paid on the car to €9600 plus any money paid on getting the car here. So if this car sells for €12000 here, i have saved €2400. 

You need to do the maths pretty well when looking into bringing a car into Ireland. You can get stung big time.

And YES the EU have said that VRT is an Illegal tax and must be cancelled pretty fast, but it will be replaced by higher road taxes, fuel taxes and even a higher or seperate Vehicle VAT rate...


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## RonanC (16 Nov 2006)

of course they will calculate the VRT based on a OMSP for a car inclusive of VRT. Sure how else can they calculate this price?? If they were to calculate VRT based on the price of the car less VRT then they would have a wrong VRT amount.


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## sonnyikea (16 Nov 2006)

RonanC said:


> of course they will calculate the VRT based on a OMSP for a car inclusive of VRT. Sure how else can they calculate this price?? If they were to calculate VRT based on the price of the car less VRT then they would have a wrong VRT amount.


 
No they wouldn't they would have a right VRT amount. That's the point. The OMSP is calculated incorrectly. 20-30% of the OMSP is VRT so therefore the VRT is 20-30% more than it should be.

Based on the logic - I should be able to go to a dealer's forecourt and find a new car for whatever the revenue think the OMSP is for that new car. However I won't be able to because the VRT is applied on this amount - every single new car is 20-30% more than the OMSP.


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## RonanC (16 Nov 2006)

what does the open market selling price of any item mean??

an item for sale to the public that includes all taxes and charges.


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## tosullivan (16 Nov 2006)

do you fancy taking this to the courts then?  I'm sure you would get a lot of backers to finance your costs.  Start a thread looking for funds and we'll all chip in.  You could be the next Mark Bosman.

Can you imagine the person in this country who managed to get it removed....a NATIONAL hero


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## tallpaul04 (16 Nov 2006)

i'd definitley be intertested in chipping in on a challenge to the courts. could we do it if we get enough parties? we would need an approx figure of how much it would cost (which would be very hard to estimate,) and how much money people are prepared to lose?


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## sonnyikea (17 Nov 2006)

RonanC said:


> what does the open market selling price of any item mean??
> 
> an item for sale to the public that includes all taxes and charges.


 
If you take my example then you would never find the item for sale to the public for that price. I understand what an OMSP is, what I don't understand is how that price is derived and whether or not the VRT calc is accurate.

The legal dispute that I included in my previous threads should uncover whether or not the calc used for the OMSP is accurate and fair so I will be keeping an eye on that. Although considering it started back prior to 99 I don't hold out much hope for a speedy conclusion to the case.

As for taking this further I am all up for doing what I can but where do you start? I'm not disputing the legality of the VRT payments from an EU free movement position what I am disputing is the calculation used to derive the figure that VRT is based on.

I'll be sure to try and get an actual answer when I am appealing my VRT payment and I'll post back here with any updates.

Thanks to all for your input.


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## Glenbhoy (17 Nov 2006)

tosullivan said:


> do you fancy taking this to the courts then? I'm sure you would get a lot of backers to finance your costs. Start a thread looking for funds and we'll all chip in. You could be the next Mark Bosman.
> 
> Can you imagine the person in this country who managed to get it removed....a NATIONAL hero


I'm sure Eddie would love to help out.  
VRT is a tax, and a pretty fair one at that, if it's removed that money will have to come from elsewhere.  
I can't see why the EU would comment on VRT as it is an internal road tax that does not hinder free trade etc, given that, I don't see what grounds there are for a legal challenge, sure we may as well take a legal challenge against income tax too.


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## RS2K (17 Nov 2006)

Glenbhoy said:


> I'm sure Eddie would love to help out.
> * VRT is a tax, and a pretty fair one at that,* if it's removed that money will have to come from elsewhere.
> I can't see why the EU would comment on VRT as it is an internal road tax that does not hinder free trade etc, given that, I don't see what grounds there are for a legal challenge, sure we may as well take a legal challenge against income tax too.




Are you insane? VRT is not one bit fair. It stops the free movement of goods around Europe. Very clearly anti EU.   

If you lived in the UK you could easily go to say Belgium and buy a cheaper new car there than was available on the local forecourt. Many people do so.


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## RS2K (17 Nov 2006)

p.s. it's not a road tax either. It's payable on registration.


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## RonanC (17 Nov 2006)

VRT has nothing to do with Road Taxes.. We do have a very expensive "Road Tax" too..

VRT is a form of DOUBLE taxation in the context of paying VAT on a vehicle and then VRT on top of that.

*IF* i win the EuroLotto this evening and there's no hope in hell of that happening, but let me dream a little, i'll buy my car from Mainland Europe and drive it back here and Will not pay a single cent in VRT as I will have bought a lovely villa on the south of France, to which the newly purchased vehicle will be registered to and I will visit this lovely country on my Holidays...


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## darag (17 Nov 2006)

sonnyikea said:


> No they wouldn't they would have a right VRT amount. That's the point. The OMSP is calculated incorrectly. 20-30% of the OMSP is VRT so therefore the VRT is 20-30% more than it should be.



You are right - the way they do the calculation doesn't make sense;  they are comparing apples to oranges.  A UK reg car is not worth the same as an equivalent Irish reg car because the former has a VRT liability.  If you went to a forecourt and looked at two secondhand cars which were exactly equivalent in every respect except one had a UK reg, would you pay the same for UK one?  No you wouldn't - you'd offer much less because you'd factor in the need to pay VRT.  Therefore the OMSP for an Irish reg car is simply NOT an appropriate guide to the value of an non-Irish reged car.

Given that you'd never, for example, be able to sell a UK reg car with an OMSP of 12K for that amount on the open market in Ireland, then it is hardly an "Open Market Selling Price".  If 12K was a fair price for the equivalent with an Irish reg, you'd only get 9230 for the non-Irish reged car (assuming 30% VRT applied).


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## sonnyikea (17 Nov 2006)

Which was exactly my assumption when I asked the VRO officer whether my car would now be worth the OMSP plus the VRT amount. When he said no I was taken aback. This has led me to question the whole thing hence my original question.

I don't think that VRT is fair but that isn't what I am questioning. I'm questioning the validity of the process and the individual elements of that process not the tax itself.

Coming from another angle. If the OMSP of my car is 12k and I bought the car for 12k in the UK without VRT and I then question the OMSP of the car stating that there is no way you could get the equilvilant car in Ireland for 12k it would more likely be 15k, and have evidence to prove this. If they then change the OMSP of the car based on my findings the only thing they are going to do is raise the value. This would then raise my VRT liability. Huh?


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## Glenbhoy (17 Nov 2006)

RS2K said:


> Are you insane? VRT is not one bit fair. It stops the free movement of goods around Europe. Very clearly anti EU.
> 
> If you lived in the UK you could easily go to say Belgium and buy a cheaper new car there than was available on the local forecourt. Many people do so.


VRT is a progressive registration tax, it hits those who buy larger cars with bigger engines more than someone less well off who can only afford a 1.0l uno, in that sense it is progressive, now you may argue that a progressive tax is not fair, and you would have a point, but imo, taxes that affect the better off to a greater degree than the less well off are fair.  As it is in effect a consumption tax, people have the choice as to whether or not to incur it and at what level to incur it.
It does not stop anyone from buying a car in the UK or elsewhere in europe, although admittedly can influence people's decisions.
Do you think it would be fair for you to have a 100k car bought in the UK, used exclusively in ireland and yet you have not contributed to the upkeep of the road network (bar a few euro in car tax)?  
What would you suggest should replace vrt?  And we're presuming that public spending inefficiencies will remain, so i want a suggestion that will raise the same revenue that vrt currently does - probably circa 1bn.


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## RonanC (17 Nov 2006)

Glenbhoy said:


> (bar a few euro in car tax)?


 
a few euro?? are you seriously having a laugh mate??

We have amongst the highest Road Tax charges in the EU and on top of that we have to pay road tolls too, with all new motorways being tolled !!!

I really think some people are living in Cookoo land. 

In the UK you can buy a VW Toureg for example.. A 2.5L model and pay about €190 per year on Road Tax. The same vehicle here will cost about €850 per year to tax. Lets say that car lasts 10 years on the road, thats €8500 in Road Taxes, and add about €15000 to that figure in an initial VRT charge and €10000 in VAT on the purchase on that vehicle.

So over 10 years, €35000 has been paid in taxes on this vehicle ( not including fuel taxes, insurance taxes and road tolls)


The same vehicle in the UK would be €8500 in road taxes over 10 years and including the initial tax on purchase


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## Glenbhoy (17 Nov 2006)

Ronan, all I'm saying is that since we have the lowest tax burden in the eu, we have to collect the tax somewhere.  IMO it's better to take it on vrt than by adding a cent to income tax or vat or other.


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## xt40 (17 Nov 2006)

"IMO it's better to take it on vrt than by adding a cent to income tax or vat or other"
Rubbish.  an extra fews % in income tax or preferably fuel duty would be much fairer  all round as you wouldnt be paying a huge lump up front and in most cases, interest on it too. it would also level the playing field as far as the eu common market is concerned.


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## Glenbhoy (17 Nov 2006)

> Rubbish. an extra fews % in income tax or preferably fuel duty would be much fairer all round as you wouldnt be paying a huge lump up front and in most cases, interest on it too. it would also level the playing field as far as the eu common market is concerned.


Fuel duty - possibly, income tax - certainly not.  Why should a pensioner in Dublin using dublin bus help pay for the construction of the road network.  If you can afford a big motor, you can afford the extra 30% and so on.  
I have a few euro to pay myself on an import very shortly, so it's not as though i'm anti-car, but i do not have a problem with vrt 'unfairness'.
Enjoy the weekend all.


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## sonnyikea (8 Dec 2006)

RonanC said:


> of course they will calculate the VRT based on a OMSP for a car inclusive of VRT. Sure how else can they calculate this price?? If they were to calculate VRT based on the price of the car less VRT then they would have a wrong VRT amount.


 
I just wanted to bring this thread back and apologise to Ronan for disagreeing with him regarding the calc used for the VRT. I bow to his better understanding of the concepts. I was coming from completely the wrong angle.


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## Frank (8 Dec 2006)

Glenbhoy

Here is a notion.

If you buy a small 1 liter car that has ABS as an option the ABS is pirce plus vat plus VRT.

Punitive VRT forces people to drive older, smaller less safe cars.

Person buys a less safe car because cannot afford to pay the extra due to VRT.

The government is potentialy taxing he driver to death.

VRT is on engine size, no regard for safety, scant regard for emmision only hybrids count.


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## briancbyrne (8 Dec 2006)

if you have a house abroad in mainland europe can you register the car there and drive it here without having to pay vrt?


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## Gone Fishin' (8 Dec 2006)

Glenbhoy said:


> Fuel duty - possibly, income tax - certainly not.  Why should a pensioner in Dublin using dublin bus help pay for the construction of the road network. ............



A pensioner using Dublin Bus contributes NOTHING to the roads.

w.r.t. VRT? It is a disgraceful tax, just another example of an anti-competitive measure used purely for the extraction of money from the motorist. It bears no relation to road expenditure and has been calculated by a cosy arrangement between the Govt and the car importers.

Some bureaucratic pen-pusher devised the VRT system. Some idiot with absolutely no comprehension as to the dynamics of cars, the engineering and safety, and settled for a cc-based system which is totally illogical.

Let's face it, a 1.6 litre Focus or Golf is a hell of a lot safer than a 1.4 litre version of the same car (just try a few overtaking manoeuvers in both and see how much safer the more powerful car is.) but our Govt sees this as an opportunity to extract/fleece the purchaser of another few euro. Why should an Airbag cost more in a 1.6l car over a 1.4 litre car? Because Mr Idiot_civil Servant decided it should.

As for imports of used cars? How does the Revenue calculate the OMSP? Nobody seems to know and they are not telling. They make it up as they go along.

We joined the EU with a promise of a free market. We have anything but, and our Govt are one of the most culpable in operating restrictive markets, and therefore higher prices for us all.


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## Gone Fishin' (8 Dec 2006)

briancbyrne said:


> if you have a house abroad in mainland europe can you register the car there and drive it here without having to pay vrt?



No you cannot. If you are resident here you must register your car here. Resident means spending over 182 days in the country in the year.


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## 3-bed-semi (17 Dec 2006)

I think the original OMSP issue the original poster refers to needs to be explained by example. The "double taxation" comment has confused some people into thinking it's something to do with paying VRT on top of VAT like the situation with new cars. 
The original post is referring to the situation where you import a car, say from the UK 2nd hand. The revenue quote the OMSP as X. The original poster was querying whether the OMSP vlaue X was the value of a similar Irish car sold on the likes of  etc. 
If the OMSP is the guesstimated value (as nobody knows how it's worked out by the revenue) then this would take into account that VRT was paid on this car first day when new. If this is what the OMSP value corresponds to then the original poster has a very good point. 

*What's Currently Happening:*
e.g.

OMSP €10,000, VRT 30% => VRT €3,000. 

*If Original Poster is Correct:*

Taking OMSP as described above €10,000, if €3,000 of this is taken as the "VRT" part of the value, then the taxable amount should only be €7,000. i.e we should only pay 30% of €7,000 not 30% of €10,000
That would mean to VRT due should only be €2100.

The Revenue really need to clarify what the OMSP is, in the example above an overpayment of €900 would have been made.

Hope this helps make the point.


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## sonnyikea (18 Dec 2006)

I was coming from the wrong angle. The OMSP is indeed the price you would expect to find the car on an Irish forecourt. Therefore 30% of that is VRT. So therefore if I buy a car in the UK I would need to get one for 30% less than the OMSP here to make it worth my while. Ronan was right.

The real crux of the matter is the OMSP and it's accuracy. As more and more people are taking the Revenue calc as the value a car is worth on the secondhand market the more this figure actually means something as it dictates secondhand prices. It's becoming the equivalent to the Parkers Guide in the UK. I've seen the OMSP to be inaccurate for a number of vehicles.


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## Gone Fishin' (18 Dec 2006)

The OMSP is woefully inaccurate for a huge number of cars. There are numerous opportunities to import a decent car for substantial savings, just remember to do it before some jacked-up Civil Servant spots it and raises the tax.

VRT is just another revenue generating scheme. It is disengenuous and outrageous, but no politicial has the balls to see it reduced.


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## darag (18 Dec 2006)

> I was coming from the wrong angle. The OMSP is indeed the price you would expect to find the car on an Irish forecourt. Therefore 30% of that is VRT. So therefore if I buy a car in the UK I would need to get one for 30% less than the OMSP here to make it worth my while. Ronan was right.


No.  I think you were right initially, unless I'm misunderstanding what you're saying here. 3-bed-semi has it right.

The way VRT is being applied is simply wrong.  For the sake of simplicity, ignore currency and the fact that manufacturers price cars differently in different countries.  Consider the case of a brand new car with a price of, let's say, 20k (excluding VRT) and say it's in the 30% VRT bracket here.  If you went into an Irish forecourt, you'd pay 26k (20K + the VRT at 30%).  If you bought it abroad, you'd pay 20K for it.  Now to get it registered here, they'd claim the OMSP is 26K (which is correct for this brand new car) BUT WOULD CHARGE YOU 30% of 26K or 7,800 so you'd end up paying 27,800 in total.  This is simply wrong - they should be charging 30% of 20K NOT 30% of 26K.

This is quite a subtle point ignoring whether VRT is justified.

A similar situation occurs, lets say if you were due to get the VAT back on a purchase worth lets say 1000 euro.  Even if the VAT rate is 21% - it does not mean you should be getting 210 back!  You should only get 173.55 back because if the item cost you 1000 including VAT, it means it was 826.45 ex VAT.


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## Guest127 (19 Dec 2006)

after reading all the posts here I think sonny, 3 bed and darag  have very valid points. looks like vrt on vrt to me.


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## xt40 (19 Dec 2006)

darag, in fair world you would be 100% correct but unfortunately, according to the revenue.ie faq question "how is it calculated"

In the case of cars and small vans, the tax  is a percentage of the expected retail price, *including all taxes in the State*.  This price is known as the Open Market Selling Price or OMSP. The VRO will calculate  this tax for you or you may obtain the details online at  Vehicle Registration on-line Enquiry System. 

is there a 2 tier system in operation whereby importers of new cars get a favourable method of calculation. if not, how do they work out the vrt on a new car


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## sonnyikea (19 Dec 2006)

I asked for clarification from the revenue if their description of the OMSP included VRT and I received a reply yesterday confirming that it is the case.

The VAT example from darag is initially the way I was thinking. I understand the way VRT is calculated but I'm lost as to whether it is a correct calculation.

I also asked the revenue to clarify if VRT was designed to make purchasing a car outside the state more, less or equally as attractive as purchasing inside the state. I haven't got the response with me but I will post it word for word tomorrow. More for information purposes for future readers than anything else.

Is there an ombudsman I can go to who will look at this? If something is mathematically incorrect then surely it can be questioned?


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## darag (19 Dec 2006)

xt40, you may be right.  However,  I suspect the rules and the calculation are actually a mistake as I think it's fair to say that there's no way this can be legal under EU law.  Remember VRT was introduced as a replacement for an illegal import duty and so should not discriminate against retailers in other european countries.  The example I gave shows how you are penalised by this tax for buying from a non-Irish retailer.

Sonnyikea, good luck persuing this.  The issue doesn't affect me but I think you have a strong case.  Here's some advice.  The Ombudsman is not the person to go to but you've started on the right path.  Get Revenue to acknowledge that the calculation penalises thoses purchasing from retailers outside the state.  If they dispute this then present them with my example which I think is conclusive proof that the existing method of calculation is unfair.  Once they acknowledge this, I think you're half way there.  If they refuse to correct the calculation, take your case to SOLVIT.  This is an EU body specifically set up to help citizens and businesses have misapplications of EU law corrected.  A person on this messageboard has already managed to force the French finance dept. to change their tax treatment of interest on mortgages raised outside of France so this crowd aren't just wafflers.  If you want help with persuing this send me a private message.


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## sonnyikea (19 Dec 2006)

darag - Revenue have already stipulated that VRT doesn't penalise purchases outside of the state so that's a no go (I'll post their response tomorrow). I am going to write back to them with the VAT example and see what they say. They are exceedingly cagey in their responses and to get them to admit to a mistake in calculation will be nigh on impossible. No harm in trying though.

I'll look into the SOLVIT area and try and educate myself in the workings. I may come back to you in the future if you don't mind. Thanks for your help.


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## sonnyikea (19 Dec 2006)

I looked at the SOLVIT site and there is a link there to some factsheets for the European Commission. One of which describes vehicle registration laws which are yet to be unified across the EU :

[broken link removed]

Selecting Ireland and English takes you to the following:

[broken link removed]

Typical.

Although there is this : [broken link removed]


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## darag (19 Dec 2006)

Sonny, if revenue are really claiming that the current method of calculation doesn't penalize purchases outside the state, then they are simply wrong and it shouldn't be at all difficult to prove this.

Of course they are being cagey!!  If they admit that there is a penalty, then they realise that they've f*cked up big time.  They may even be liable to refund the difference which for example will be 23% of the VRT they've collected from people who've imported 2,001CC (or more) cars.  I suspect the amount involved might be significant so you might have a fight on your hands.


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## xt40 (19 Dec 2006)

does anyone work in the motor industry. ? if so, could they gather the numbers
-base price, vat and vrt  elements for a specific new model. if revenue then quote the exact same figure to joe public attempting to import the exact same  brand new model from uk then, all is fair, otherwise they dont have a leg to stand on. either way, it would end the speculation.


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## RonanC (19 Dec 2006)

it is also widely known that we have some of the cheapest PRE-TAX car prices in the EU so comparing Pre tax prices in Ireland to UK isnt really going to work out correctly.


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## xt40 (19 Dec 2006)

i dont give a toss about the uk pre-tax price.


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## darag (19 Dec 2006)

That's true Ronan but this is much simpler.  You only need to prove that the calculation is discriminatory which it is.  We can avoid the whole vagueness around how OMSP is derived.  In fact I suspect the statement "In the case of cars and small vans, the VRT payable is a percentage of the expected retail price, including all taxes in the State." which is on their website is incriminating enough since the VRT retailers in Ireland pay is calculated on a more favourable basis - i.e. ex VRT.


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## sonnyikea (19 Dec 2006)

darag - not sure they are more favourable. The calc is the same for a new car as it is for a secondhand car. It includes VRT. If a car is 20k book, add on the VAT etc then add on 30% VRT. This gives you the OMSP of the new car. The VRT is then 30% of that value. This then ties in with your VAT example?

I'll post the exact wording tomorrow and maybe someone less confused than I can interpret the meaning.


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## xt40 (19 Dec 2006)

the wording is freely available, its how it is implemented that in question.


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## funlovin (19 Dec 2006)

i was looking at all the comments about vrt tax and agree its a sick invention by the irish tax authorities (in cahoots with the irish motor sales industry!)to prevent loss of sales in ireland of new and used cars to cheaper Continental sellers.that lovely new BMW showroom in finglas would close over night if we could all fly to Germany with ryanair and drive back with a brand new top of the range BMW ,with a serious wad of euros left over in our pockets.ireland would cease to have a motor industry (as is)but a few dealers willing to reduce profits and margins would come to the fore selling cars on par with Europe thus restoring the natural balance of commercial life.but the government in its wisdom continues to support this monopoly at its citizens cost .shame on them . its like if the government had tried to save the t-shirt manufacture industry in donegal by taxing foreign imports from china to give the irish guys a barrier..! its the same thing! ever tried to buy a car lately ? i have and was met with salesmen smug in knowing that the dealer in the country was not going to undercut him as the cartel has been sealed ...no more do salesmen fall over themselves to seal the deal .its "thats the price take it or leave it !"if i could turn around and say well Gunter in Germany is charging 3k less what bargaining power that would be ! i was thinking would it be possible to say ,buy a new car in Latvia in a shelf company's name and set up some token rental agreement ,where by you are the renter of the car ,so when you bring it to Dublin you are only the renter not the owner !so ,would you still have to pay vrt ? vat? only vat in country of purchase .rental agreement could be in such a way that the ownership is transferred to you after say 5 yrs .the money would be held in a swiss bank ,and as you are a director can be recouped also.i know alot of maybes but when you hear what the big fish do to avoid paying alot of tax maybe its not that far fetched ? any one wanna start a company


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## sonnyikea (19 Dec 2006)

Ok so the offical response from the revenue is as follows:

_Section 132, Finance Act, 1992, provides that VRT shall be charged on a category A vehicle at the rate of a percentage of the value of the vehicle. Section 133 of the Act provides that the value shall be taken to the open market selling price ("OMSP") of the vehicle at the time of the charging of the tax thereon._

_The section provides that the OMSP of a new vehicle on sale in the State, which is supplied by the manufacturer or sole wholesole distributor, is the price declared to the Revenue Commissioners, inclusive of all taxes and duties, which, in the opinion of the manufacturer or distributor, a vehicle of that model and specification, including any enhancements or accessories fitted or attached thereto or supplied therewith by such distributor, might reasonably be expected to fetch on a first arm's length sale thereof in the State by retail. Thus two new cars of the same make, model, version, and specification, supplied by the sole wholesale distributor, registered on the same day, will attract the same amount of VRT._

_The section provides that, in the case of any other new vehicle, the OMSP is the price, inclusive of all taxes and duties which, in the opinion of the Revenue Commissioners, would be determined under the section if the vehicle were on sale in the State following supply by a manufacturer or sole wholesale distributor in the State. Thus a new car, of the same make, model, version, and specification, as the cars mentioned above, registered on the same day, but supplied other than by the manufacturer or sole wholesale distributor, would attract the same amount of VRT._

_The section provides that, in the case of a category A vehicle other than a new vehicle, the OMSP is the price, inclusive of all taxes and duties, which, in the opinion of the Revenue Commissioners, the vehicle might reasonably be expected to fetch on a first arm's length sale thereof in the State by retail, such price to include the value of any enhancements or accessories which, at the time of registration are not fitted or attached or sold therewith but which would normally be expected to be, unless it is shown to the satisfaction of the Revenue Commissioners that they have not been removed or not sold therewith for the purpose of reducing its OMSP._

_The Revenue Commissioners determines the OMSPs for vehicles other than new vehicles by methods including reference to trade guides, advertisements, and consultations with the trade and other knowledgeable persons._

And in response to a subsequent letter asking for clarification that 'all taxes' includes VRT:

_The expression "all taxes" does includes VRT. VRT is charged once only on registration of the relevant vehicle._


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## Guest127 (20 Dec 2006)

RonanC:  Thought the brits got this sorted ie car manufactures/suppliers can no longer charge higher base prices in uk before tax. almost certain they have levelled the  pitch with most EU countries.


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## blognet.info (30 Dec 2006)

*importing a stretch Hummer*

Hi Guys

I am Looking at importing a stretch Hummer to Ireland to hire out etc. Has anyone else gone down this road with the Revenue and as 
(is it a Commerical,) OR class (a) what  VRT ? will i have to pay and vat if it a us import

Regards


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## Gone Fishin' (2 Jan 2007)

cuchulainn said:


> RonanC:  Thought the brits got this sorted ie car manufactures/suppliers can no longer charge higher base prices in uk before tax. almost certain they have levelled the  pitch with most EU countries.



Car Manufacturers can charge whatever price they like, in any country. The only legislation which has been passed forbids the restriction of car sales in any country, to customers from another country. VW have been the biggest losers suffering a huge fine for anti-competitive practises. Unfortunately the derrogation that allows VRT is still in place.


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## jmayo (2 Jan 2007)

To answer Glenbhoy earlier in the thread:
if you think forking out over €550 per year in road tax is a few euro then I want your salary/income.

That amount does not count all the other ancilliary charges for using our brilliant road network.  There are tolls on the M50 traffic jam, the M4, the East Link, the M1 and most of the other new roads.

I drive down West almost every two weeks.  That costs me €5 for the priviledge of using the new M4.  Check out how may commericals use that road and you see how successful it has been in diverting heavy goods vehicles away from Enfield and Kinnegad.  It's a joke.

The motorist helps pay for a lot more than the roads.  They are easy targets and the fact that VRT remains flies in the face of the supposed free movement of goods within the EU.
Rant over with....

My question is how can VRT be phased out since if you drop it immediately you will have an outcry from existing car owners that the value of their cars have been slashed overnight ?
Why buy second hand when you can buy as cheap new.
Would it be phased out over 3/4/5 years ?

I can only just wonder what our immaginitive government/civil service come up with as it's  replacement - an emmissions tax ?


[broken link removed]


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## badinfleunce (5 Jan 2008)

I agree there is double taxation on the vrt calculation and even more there is a triple taxation if there is such a term.

For instance if a cars open market selling price is 10000 euros and the vrt is 30%. The VRO calculate it in the following way. Firstly they get 30% of 10000€ which is 3000€ and then they add 21% Vat not on the 10000€ but to the 13000€ which adds up to 15730€. If we take 15730€as a percentage of the OMSP of 10000. this equals 63.57%. Thats the amount of tax we are really paying. The revenue like to disguise it but some clever clogs in the ivory tower came up with this creative tax calculation.

My second point is that the OMSP seems to be calculated on the Irish market only. As part of the EU we should be able to find products i.e. cars european wide and pay the lowest price without penalty. Isnt that what being part of europe is all about?? So if i find a Toyota avensis in the UK for £5000stg and convert the price using todays exchange rate of 1.40 the car would have an European Open market selling price of 7000€. If you look at the Irish market the same car has an infalted value of 15000€. Surely i should be able to pay VRT on the 7000€, as we are part of the european single market. This would mean my vrt bill would be 2100€ instead of 4500€ a saving of 2400€.


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## werner (6 Jan 2008)

Glenbhoy said:


> I'm sure Eddie would love to help out.
> VRT is a tax, and a pretty fair one at that, if it's removed that money will have to come from elsewhere.
> I can't see why the EU would comment on VRT as it is an internal road tax that does not hinder free trade etc, given that, I don't see what grounds there are for a legal challenge, sure we may as well take a legal challenge against income tax too.


 
In 2002 the European Court of Justice ruled that aspects of VRT constitute a form of double taxation and are therefore illegal under the EU treaty. It also hinders free trade. 

The ruling came in after a Finnish citizen took a case against his own government. He claimed that by levying VRT on a used car he had imported into Finland, the government taxed the same car twice, because the tax ignored the value of the tax already paid on the car in another member state

The EU court ruled that the VRT law in Finland conflicts with the EU treaty, and is illegal. The ruling should affect the operation of VRT in Ireland

The European Commission has also called for the abolition of vehicle registration tax in the EU. Until its abolished they said that states should ensure that their VRT systems did not discriminate by imposing a double taxation burden on motorists importing second hand cars from other member states

There is a clear case that could be taken here on Irish VRT double taxation


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## stir crazy (6 Jan 2008)

briancbyrne said:


> if you have a house abroad in mainland europe can you register the car there and drive it here without having to pay vrt?





Gone Fishin' said:


> No you cannot. If you are resident here you must register your car here. Resident means spending over 182 days in the country in the year.




Whats to stop you registering the car into the name of a relative living at an address abroad e.g London ? The relative says he wants the car to use when he visits home, therefore imports it and leaves it in the republic. I pay him off and I get to drive a flash motor but registered in his name at the foreign address?  ?

Then at some point in the future we can transfer the names across.

I was just discussing this today. A friend of a friend is doing exactly this. And I hear about people with addresses up the North doing this too. Are there any pitfalls or a downside I dont see ?


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## briancbyrne (7 Jan 2008)

...as an aside, if there has been a ruling by the european courts holding this taxation illigal, and we as a country voted to join the EU and changed our constitution to reflect this, would this tax not represent a contravention of our constitutional rights as both Irish & EU Citizens ??


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## stir crazy (8 Jan 2008)

stir crazy said:


> Whats to stop you registering the car into the name of a relative living at an address abroad e.g London ? The relative says he wants the car to use when he visits home, therefore imports it and leaves it in the republic. I pay him off and I get to drive a flash motor but registered in his name at the foreign address?  ?
> 
> Then at some point in the future we can transfer the names across.
> 
> I was just discussing this today. A friend of a friend is doing exactly this. And I hear about people with addresses up the North doing this too. Are there any pitfalls or a downside I dont see ?




But is there anything to stop me driving somebody elses (a relatives) car which I dont own ?


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## The-Detector (31 Mar 2008)

The Detector just say:

"Everybody who supports or finds VRT a "Fair Tax",
has just to much money to waste."

"Be prepared harder times will come!
Don't wait to long - stand up and fight ... Now!"


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