Vrt

MrPudding

There is a alot of talk about VRT and the fact that it is, apparently against EU law.

Has anyone actually challenged it in court. If so did they win? What would be the cost for mounting such a challenge? Would it be worth mounting a test challenge? Am I talking sh1t?

MrP

Litcagral

MrPudding wrote:

There is a alot of talk about VRT and the fact that it is, apparently against EU law.

Has anyone actually challenged it in court. If so did they win? What would be the cost for mounting such a challenge? Would it be worth mounting a test challenge? Am I talking sh1t?

MrP

I think it is all about semantics. It may have previously bee an import tax but that was probably changed to a Registration tax so that it can be claimed that there is no import tax. I could be talking shíte also!

ambro25

Government will fight against EU proposal to abolish VRT
Daniel Attwood

An EU proposal could end many of the motor tax anomalies faced by motorists, such as the double-taxation penalty they face when they import a used car from another member state.

EU tax commissioner Laszlo Kovacs aims to prevent governments from charging a vehicle registration tax (VRT) on imported vehicles which have already been registered in another EU country. In addition, he hopes that within a decade the 16 EU countries - including Ireland - which now apply VRT, will replace it with an emissions-based tax.

Kovacs's proposal echoes that of his colleague Frits Bolkestein's three years ago. "I am determined to tackle the tax obstacles which individual citizens and car makers face within the internal market arising from 15 different systems of motor taxation," said the European Commissioner for the internal market, taxation and customs in 2002.

Bolkestein's determination was met with an equally steely determination from some countries to retain the present system.

Kovacs will now doubtlessly face similar resistance from the Irish Government, which has resolutely and consistently refused to entertain any ideas of scrapping VRT - worth over €900million this year.

"VRT provides significant revenue to the Irish economy which is used to fund vital public services," explains the Department of Finance. "If Ireland removed VRT, it would be necessary to fund this in different ways. For example, this would need in excess of a 2 per cent increase in the standard rate of tax."

With the government determined not to increase personal tax levels, it's clear Kovacs will have an uphill struggle. Indeed, the Government's refusal to abolish VRT remains firm despite calls from the EU, the motor industry in Ireland, which has long campaigned for the tax to be abolished, and its own citizens.

Despite the European Commission regarding Ireland's vehicle tax regime as going against the spirit of the EU, it cannot force the Minister for Finance to scrap VRT. However, it can put pressure on the Government, as can individuals unhappy with the system.

Ireland's VRT regime is indeed being challenged by frustrated citizens, although so far without success. One motorist recently had his legal challenge terminated after an investigation by the European Commission into Ireland's VRT policy on the importation of used cars. In a letter, the commission conceded that VRT is not harmonised in the EU, so countries may define their own taxes as long as they respect certain conditions.

The commission believes that the Government is respecting those conditions, and therefore can continue to charge VRT on imported used cars under its present system.

But, under Kovacs's proposals to the European Commission, VRT could be scrapped in all EU countries by 2015.

At present there are massive differences in the amount paid to register a vehicle, depending upon which country they are in. For example, Britain charges a minimal fixed sum, while Ireland charges a hefty percentage of the VAT-inclusive open market price of a vehicle.

Across the EU, 16 countries apply VRT, while nine have no registration tax. It's these differences which Kovacs hopes to wipe out within a decade.

"It will benefit the internal market, the environment and the consumer," Kovacs told the media on Monday. He says that VRT should be abolished and incorporated into annual road tax or fuel duty.

"Ireland is open-minded on environmental fiscal measures," said a Department of Finance spokesperson in response to the suggestion of replacing VRT with an emissions tax. "However, as with tax generally, we would maintain that vehicle taxation should stay under the remit of national governments."

With the approval of countries such as Ireland needed for his proposal, Kovacs's 10-year plan seems doubtful. However, the tax commissioner remains hopeful that his plan to scrap VRT and link a replacement tax to either fuel or emissions will go ahead.

© The Irish Times Road Tests Archive

From OP here, Google is your friend

MrPudding

ambro25 wrote:

From OP here, Google is your friend

That brings up another question. As citizens of the EU do we not have the option to choose where we pay VAT. My understanding is that you can choose to pay it in the state where you buy an item or where you are going to use it. In the case of buying a new car outside Ireland the gov forces you to pay the VAT here. Illegal?

MrP

skyhighflyer

MrPudding wrote:

There is a alot of talk about VRT and the fact that it is, apparently against EU law.

Has anyone actually challenged it in court. If so did they win? What would be the cost for mounting such a challenge? Would it be worth mounting a test challenge? Am I talking sh1t?

MrP

Although VRT hasn't been challenged in Ireland (by which I mean a case actually making it to the ECJ or CFI), the equivalent to VRT in many other countries has been:

112/84 Humblot v French Director of Taxes 1985 ECR 1367

http://europa.eu.int/smartapi/cgi/sga_doc?smartapi!celexplus!prod!CELEXnumdoc&lg=en&numdoc=61984J0112

132/88 Comm v Greece 1990 ECR I-1567 (“Large Greek Autos”)

http://europa.eu.int/smartapi/cgi/sga_doc?smartapi!celexplus!prod!CELEXnumdoc&lg=en&numdoc=61988J0132

Basically, EU Member States are free under EU Law to tax cars however they wish, as long as they tax them on the basis of objective criteria provided that the tax is:

• compatible with EC objectives
• not discriminatory against imports
• not protective of domestic production

In the Irish context, the justification for high VRT usually trotted out by the Government is concern for the environment (a justification compatible with EC objectives). As we have no domestic production of cars the second and third criteria above don't apply.

The existing case law is clear that VRT as it is currently applied <b>is legal.</b> I don't know why so many ill-informed commentators seem to think otherwise. That's why the SMMT haven't bothered taking a case to the ECJ. I'm not sure what the cost would be of taking a case to the ECJ but I'd imagine it would be huge... and it'd probably take around 5 years to get an answer.

Victor

The government won't shift from VRT to additional fuel taxes because of the amount of fuel we export casually to the UK.

jjbrien

Sorry guys but i had to ask what ever happend with this was vrt delared illigal by the eu? We were talking about this at work and nobody really knows.

Maximilian

I don't think it was ever declared illegal but the Commission don't like it. The tax effectively operates like an import duty, as all cars are imported here. I think its the case that although not against the letter of the law, its against the spirit or something like that. I assume if this were not the case, the tax would have been challenged by the motor industry here a long time ago.

Robbo

To revisit this, Gormley appears to have introduced a system whereby any cars older than an 08 imported after July will be on the old road tax tarriffs (CC Based), effectively creating a system that discriminates against imports of a certain age.

It's been intimated that this is because of inadequate emissions info (although all cars sold in the EU since 2001 have had emissions on the log book).

Who else reckons this is a disproportionate measure equivalent to a quantitive restriction?