EU to zero rate EV VAT

jonnythefox

https://electrek.co/2020/05/19/electric-cars-boost-europe-recovery-plan-vat-exemption/

Who thinks this is going to happen in Ireland?
If it does will it get the go ahead before the June ordering date?
If it gets the go ahead after ID3 is ordered in June where does that leave the buyer?

liamog

Orginailly posted in the ID.3 thread, but probably good for a more general discussion.

Rumours via bloomberg that the EU will allow zero rating of VAT for EV purchases as a stimulus to the automotive sector.

https://twitter.com/C_Barraud/status/1262761982983204864

unkel

Unlikely to happen in Ireland. A zero VAT is basically a subsidy from the Irish tax payer to foreign car manufacturers. Once the EU allows the zero VAT on EVs, it's quite likely this will be implemented in France and Germany though. Giving EV sales a huge boost over there.

What will give the sale of EVs a good boost in Ireland at very little cost to the tax payer is free motor tax, free tolls and free nationwide parking anywhere (without having to be charging at the same time)

jonnythefox

If Europe is not unified with this incentive, in theory could someone buy an vat free EV car in France for example and drive it back to Ireland and just pay the VRT. Am I missing something?

Padre_Pio

jonnythefox wrote: »

If Europe is not unified with this incentive, in theory could someone buy an vat free EV car in France for example and drive it back to Ireland and just pay the VRT. Am I missing something?

You need to own the car for over 6 months and have 6000km I think.

Also it would be a left hand drive.

You pay VRT minus 5k rebate.

sdanseo

unkel wrote: »

Unlikely to happen in Ireland. A zero VAT is basically a subsidy from the Irish tax payer to foreign car manufacturers. Once the EU allows the zero VAT on EVs, it's quite likely this will be implemented in France and Germany though. Giving EV sales a huge boost over there.

What will give the sale of EVs a good boost in Ireland at very little cost to the tax payer is free motor tax, free tolls and free nationwide parking anywhere (without having to be charging at the same time)

It should be forced upon the Irish government. We don't manufacture cars here.
I could understand protecting an Irish motor manufacturing industry but protecting resellers is a ludicrous situation.

We already have VRT, and VRT is beyond protectionism, it's extortion.

And if you think we're bad, Denmark's cost of ownership is twice as high.

The EU needs to sharpen its teeth on the issue.

unkel

sdanseo wrote: »

It should be forced upon the Irish government.

It can't be forced. If this passes, it willow allow members to charge a zero rate. Not force them to.

drunkmonkey

This is needed badly, not a hope EV's will take off in any meaningful way without something big.
Is it for EU manufacturers only I wonder....

Minimum vat rate is 15% now. this allows it to be dropped to below that.
Lower purchase price certainly helps with benefit in kind tax too.

unkel

Deleted User wrote: »

Lower purchase price certainly helps with benefit in kind tax too.

Benefit in kind is zero on EVs in Ireland

(unless they are very expensive)

Marcusm

jonnythefox wrote: »

https://electrek.co/2020/05/19/electric-cars-boost-europe-recovery-plan-vat-exemption/

Who thinks this is going to happen in Ireland?
If it does will it get the go ahead before the June ordering date?
If it gets the go ahead after ID3 is ordered in June where does that leave the buyer?

VW and Renault will have to have a larger range and availability of models before this will be sanctioned!

liamog

The EU recovery fund is meant to be announced tomorrow, green and digital are meant to be the main pillars.
It's always easier to spend money by foregoing tax than it is to source money to pay for subisdies.

Calahonda52

Dealer prices will just go up here: same when the hospitality got the vat reduction, prices stayed the same: gougers

Gumbo

liamog wrote: »

The EU recovery fund is meant to be announced tomorrow, green and digital are meant to be the main pillars.
It's always easier to spend money by foregoing tax than it is to source money to pay for subisdies.

It’s mad how all this crosses each sector.
I heard about these EU Pillars, particularly the digital one in the drive for BIM and creating digital copies of buildings etc

drunkmonkey

12k vat on a model 3 long range with paint and nicer alloys. I presume Tesla will be excluded as there manufactured in the US, where are ford building the UK and Ireland mustang?
If Ireland don't zero the vat could we just buy one in Malta or the UK.

slave1

drunkmonkey wrote: »

12k vat on a model 3 long range with paint and nicer alloys. I presume Tesla will be excluded as there manufactured in the US, where are ford building the UK and Ireland mustang?
If Ireland don't zero the vat could we just buy one in Malta or the UK.

They'll catch us on the VRT

drunkmonkey

I could be wrong but isn't vrt added after vat, so with 0 vat it'll reduce the VRT as well, open to correction.

Round Cable

drunkmonkey wrote: »

12k vat on a model 3 long range with paint and nicer alloys. I presume Tesla will be excluded as they're manufactured in the US, where are ford building the UK and Ireland mustang?

The Mustang Mach E will be manufactured in Mexico, although I doubt this potential incentive will be based on country of manufacture.

drunkmonkey wrote: »

If Ireland don't zero the vat could we just buy one in Malta or the UK.

With the UK out the door of the EU, importing from there in 2021 is likely to be a more costly proposition. I would imagine the Maltese car market would be quite small, and in 2011 about 2/3rd of Maltese registrations were themselves imports.

drunkmonkey

The Maltese vrt prices are nearly identical to what we pay here the last time I checked.

Padre_Pio

slave1 wrote: »

They'll catch us on the VRT

VRT is 14% of OMSP minus €5000.

I presume the OMSP will be calculated on cars inclusive of VAT.

Gforcemurphy

drunkmonkey wrote: »

...where are ford building the UK and Ireland mustang?

I believe they’re all being built in Ford’s factory in Mexico (for all markets). Consensus seems to be that a degree of priority will be to ship to EU in order to meet quotas.

slave1

Better off if they took the VAT off the electricity end of things (public chargers)

liamog

slave1 wrote: »

Better off if they took the VAT off the electricity end of things (public chargers)

I don't think that would make much difference though it could be a useful symbolic change. Removing the VAT from my eCars membership would save 6c/kWh. It would save me approx €30 per year.

Iceland has removed VAT from the first 6,500,000 kr which is approx €41,500.

Lantus

Vat drops are like subsidies to dealers and manufacturers who can carve up the gap with pure profit.

It eliminates any need to drive cost efficiency when there are free money bags on offer.

liamog

Lantus wrote: »

Vat drops are like subsidies to dealers and manufacturers who can carve up the gap with pure profit.

It eliminates any need to drive cost efficiency when there are free money bags on offer.

That's largely the point of the move, this isn't about making EVs cheaper, it's about a politically expedient way of delivering funds to the automotive industry.

Automotive covers around 6% of the EU workforce, the manufacturers are saying that they are going to have trouble handling the economic downtown and the shift to cleaner vehicles and have requested support. The EU has suspended state aid rules for a period due to the pandemic. Without support some auto makers would suffer and very probably get snapped up by Chinese finance. The VAT cut allows governments to incentivise demand for new cars, by targeting it at EVs it encourages them to build more EVs and can be seen as some as encouraging auto makers to "do the right thing"

The high cost of cars in Ireland prevents a lot of People buying new.

The Model 3 is a lot cheaper in the USA due to tax differences especially.

We are fleeced in Ireland and the Irish Government never understood that if stuff is cheaper to buy People will spend more thus creating more revenue to the Government rather than directly take it, it's the same with the Income tax, the more People have to spend the more they will spend.

Why does no one in the Irish Government get this in 2020 ?

Forcibly extracting tax gives nothing to the People where as if they have the choice they will spend more, build that extension, upgrade the house, buy new car, go away for the weekend all revenue sources.

Lots of People can't buy new cars due to this extortion taxes we pay so the burden is on the new car buyer the 2nd hand buyer pays no vat or vrt. It's madness.

the Irish Government are still exploiting the VRT loophole and it will not stop, offer 0 VAT on new electric cars ? not a chance in hell + 10 K vrt inc grant.

They want us addicted to Petrol and Diesel, a gravy train in revenue.

unkel

Deleted User wrote: »

The high cost of cars in Ireland prevents a lot of People buying new.

The Model 3 is a lot cheaper in the USA due to tax differences especially.

We are fleeced in Ireland and the Irish Government never understood that if stuff is cheaper to buy People will spend more thus creating more revenue to the Government rather than directly take it

Nice rant, but you're not on the ball for electric cars here

A €48k Model 3 brings in feck all in revenue. Just a few grand in VRT / VAT after the €10k subsidy. And then the tax payer has to further subsidise the owner with €600 for the charge point install and then subsidies for tolls, on top of just the very minimum motor tax (just about half that of an old 1l Nissan Micra)

And of course the thousands then missed every year in excise duty that was on fossil fuels but is not on electricity

EV is loss making for the tax payer at the moment...

drunkmonkey

If the EU do bring in the Vat discount I can't see the government just dropping the current incentives. They'll hardly give both and I think the greens want them scrapped anyway as money could be better spent elsewhere like public transport.

slave1

Given the cost of Covid etc. now is not the time our Gov can afford to push this through

pdpmur

unkel wrote: »

Nice rant, but you're not on the ball for electric cars here ...

He's not far off the mark about fossil fuels, though!

Currently €1.08/l for diesel at the pumps, compared with €0.40/l for home heating oil.

Where will all of the lost revenue from loss of diesel sales come from? The governing class is still collectively traumatised over Irish Water charges debacle and they won't want to be seen to be slapping new taxes on the electorate.

Kramer

unkel wrote: »

A €48k Model 3 brings in feck all in revenue. Just a few grand in VRT / VAT after the €10k subsidy.

A Model 3 SR+ (cheapest Model 3 here) is under €36k after removal of all VAT & VRT, so there's still €12k tax included in the €48k purchase price.
That's still 25% & doesn't include the non-eu tariff - is that 10%?

Round Cable

Kramer wrote: »

A Model 3 SR+ (cheapest Model 3 here) is under €36k after removal of all VAT & VRT, so there's still €12k tax included in the €48k purchase price.
That's still 25% & doesn't include the non-eu tariff - is that 10%?

It is indeed 10%, imagine how competitive Tesla would be in Europe without it. It would make a 62kWh Nissan Leaf Tekna about the same price as a Tesla Model 3 SR+.

liamog

Round Cable wrote: »

It is indeed 10%, imagine how competitive Tesla would be in Europe without it. It would make a 62kWh Nissan Leaf Tekna about the same price as a Tesla Model 3 SR+.

I expect it would be near enough the same price and they'd just increase the margin. We've seen how Tesla behaved during the phase out of the US federal incentive, they reduced the car price a couple of times to meet the new price point.

liamog

So it looks the commision proposal will be detailed on the 27th. It comes as part of a general "Green Deal" programme which is designed to pump half a trillion Euro into the economy.
Particularly of interest to this forume should be the following

• 60 billion euros to 80 billion euros to boost electric vehicle sales and a doubling of investment in charging networks
• Option to exempt electric vehicles from VAT

Other incentives

• 91 billion euros a year in grants and guarantees for sealing up drafty buildings - including plans to offer home buyers green mortgages
• 10 billion euros to leverage finance for 7.5 gigawatts of new renewable energy projects over the next 2 years
• 10 billion euros a year in a fund administered by the European Investment Bank to boost renewables and hydrogen infrastructure
• As much as 30 billion euros from the EU’s existing Innovation Fund for the development of green hydrogen that can curb emissions in some of the hardest to tackle industries, like steel and cement making

https://www.bloomberg.com/news/articles/2020-05-20/eu-to-unveil-world-s-greenest-virus-recovery-package?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosgenerate&stream=top

Lumen

unkel wrote: »

Nice rant, but you're not on the ball for electric cars here

A €48k Model 3 brings in feck all in revenue. Just a few grand in VRT / VAT after the €10k subsidy. And then the tax payer has to further subsidise the owner with €600 for the charge point install and then subsidies for tolls, on top of just the very minimum motor tax (just about half that of an old 1l Nissan Micra)

And of course the thousands then missed every year in excise duty that was on fossil fuels but is not on electricity

EV is loss making for the tax payer at the moment...

It depends on your definition of "loss".

My Model 3 LR contributed over 10k of VAT and VRT. That is only a loss compared to me spending the same on an ICE car, which was never a possibility. But I might well have spent the money on foreign holidays, which would have brought in almost zero, or left it in the bank, which would contribute exactly zero to the exchequer.

There's also the 10% import duty.