VRT for new cars.

TheLedge

I've read that when you buy a NEW car from approved main dealers in the UK, that they can sell you the new car VAT FREE, provided you intend exporting the car within 6 to 12 months of the purchase date.

Does this mean therefore, that I could expect to purchase a NEW CAR in UK, pay no TAX, and then import to IRELAND, avoid the VRT by way of exemption being able to prove ownership abroad for more than 6 months. ???

This way I could potentially buy a car costing 12 grand stg, for about 9.5 stg, and then own it in Ireland, 6 months old having paid the equivalent Euro Price of 13,500. The car I'm basing this on would have an Irish OMSP of about 19k.

I know my figures may be slightly off, but the question is, is there anything wrong with the reasoning behind it?

mackerski

Off top of head - usually schemes that allow you to reclaim VAT on goods you'll be exporting require that you export them not merely from the state, but from the entire EU. So if you wanted to bring it to Iceland or Norway, maybe that would help you.

Always assuming that you do manage to invoke this scheme for an export within the EU, you'll have to pay Irish VAT on it at a higher rate than the UK VAT you claimed back.

Dermot

MrPudding

You have to pay Vat somewhere. For most things you can choose where you want to pay the VAT (within the EU I mean) the country of purchase or the country of use. Interestingly, if you buy a car you must pay the Vat in Ireland if you are going to use the car here. Before you will be able to register the car Vat will have to be paid.

MrP

Dades

What they said...

21% payable at the point of entry on the declared value of the car, I believe.

ambro25

MrPudding wrote:

Interestingly, if you buy a car you must pay the Vat in Ireland if you are going to use the car here. Before you will be able to register the car Vat will have to be paid.

That AND the VRT? :eek:
F***ing Hell!

MrPudding

ambro25 wrote:

That AND the VRT? :eek:
F***ing Hell!

I know. You are supposed to be able to make the decision on where to pay Vat yourself. But not if you are an Irish resident and buying a car.

MrP

ds20prefecture

Is this something we should "lobby" similar to the M50 toll? My understanding is that the way that VRT is charged in this country is at best a stealth tax and at worst illegal and fraudulent.

i.e.
Distributor buys car from manufacturer, paying VAT on import on the pre-tax price of the car.
Distributor sells car to dealer - at this point the VRT is added: calculated on a slidining scale as a percentage of the price of the car now (i.e. including VAT).
Dealer sells car to customer, adding 21% VAT to the total amount - effectively charging VAT twice.

The net effect is that on, say, a 2Litre Mercedes, 60% of the amount paid by the purchaser goes to the government. Who then collect road tax, tolls and fines. What department does all this tax go to? How is it spent?

Ireland's pre-tax car prices are among the lowest in Europe. This is why our cars have such poverty specs compared with the UK.

Is my understanding wrong? I remember the RTE Drive magazine show did something on this, but I might have lost something through indignation.

unkel

ds20prefecture wrote:

My understanding is that the way that VRT is charged in this country is at best a stealth tax and at worst illegal and fraudulent

Your understanding is correct. VRT is an "illegal" tax because it is totally against the EU principle of free movements of goods, services and people

However it was sanctioned by the EU that Ireland was allowed to keep it's (predecessor of) VRT because the government argued Ireland could not afford not to charge it. Of the top of my head, the amount involved at the time was about £100 million or so and the amount collected now is about €1 billion, so fat chance the government will drop it now :mad:

BTW Ireland is not the only country within the EU with VRT. The Netherlands and Denmark spring to mind as the others

MrPudding

Has anyone actually gone to court and fought VRT? It would be an interesting (an expensive) case. I would have thought that someone buying a car in the UK and briinging it over here would have a good case against the gov on the subject of VRT and also the they require the buyer to pay the VAT here thus removing that persons EU law given right to pay the VAT where they choose.

MrP

Dades

ds20prefecture wrote:

Distributor buys car from manufacturer, paying VAT on import on the pre-tax price of the car.
Distributor sells car to dealer - at this point the VRT is added: calculated on a slidining scale as a percentage of the price of the car now (i.e. including VAT).
Dealer sells car to customer, adding 21% VAT to the total amount - effectively charging VAT twice.

Is my understanding wrong? I remember the RTE Drive magazine show did something on this, but I might have lost something through indignation.

But businesses with turnovers of a certain amount can claim back VAT, so therefore it isn't added to the price of a car before you pay it.

Remember - VAT is payable once on anything you buy.

VRT is designed simply to stop everybody buying their cars overseas. Which of course is no consolation to anyone :mad:

mackerski

The big scandal of VRT is how it applies to every aspect of the factory fit-out of a new car. The poverty-spec cars aluded to already are a consequence of this. The stupidity of this is that plenty of safety options that should be officially encouranged are very rarely ordered. These include:

* Extra airbags
* Traction and stability control
* Reversing sensors

As well as ones that can have an indirect safety gain, like auto transmission, navigation systems or the like.

Dermot

MrPudding

ds20prefecture wrote:

Ireland's pre-tax car prices are among the lowest in Europe. This is why our cars have such poverty specs compared with the UK.

Not any more. The EU has forced them to stop the block exemption rule (or something). Ironically this was to stop the manufacturers from fixing prices accross Europe and give consumers a better deal. UNforunately it mean that for most europeans this will mean a reduction in the price of cars but for us it will mean an increase and the manufacturers can no longer offer Irish distributors cheapers car to partially offset VRT.

We still have the poveryy spec but the pre tax prices will be rising to match the rest of europe as it is unlikely the manufacturers will offer the cheaper price to everyone.

Did I explain this ok?

MrP

MrP

ambro25

On the VRT topic, this thing's been done to death herein before and it's just not gonna go.

But on the VAT issue, it's just abso-f*ck*g-lutely scandalous, as this is in total breach of the most basic principle of free movement of goods within the EU (which is itself one of the most important, underlying tennets of the EU) and that I can't believe Ireland is getting away with... particularly when it is so obviously for the purpose of discriminating against foreign (EU-based) competition in such a specific, sensitive market (in the EU) as personal vehicles. :mad:

ambro25

But, incidentally (just calming down some) - if the VAT situation thing is right, why then is there no mention of it on the revenue info (or on forms when applying to reg' a foreign vehicle in IE?).

So far as I know -and I've recently applied for VRT exemption under the 6 months/1 year rule- there has been no mention of paying a VAT differential whatsoever?

In any case, if they ask for it (the VAT differential) you'll be happy to know that you'll be getting brand new case law

Dades

Okay...

The Revenue will only charge VAT on an item which has never had VAT charged on it anywhere in the EU.

ambro25 - you will have paid UK VAT therefore will not have to pay it again when you bring it into Ireland.

I'm importing a car from Canada at the moment - and will have to pay VAT because I'm bringing it in from outside of the EU. I doesn't matter that it's second hand - just that VAT was never paid on it.

Second hand cars imported from the EU are not subject to VAT (I think) as the VAT would have been paid at the time of their original purchase.

The only situation I can think where you would pay VAT is the OPs situation, where no tax was paid as the new car is to exported (to Ireland) immediately.

That's my reading of the situation, anyways...

ambro25

The Atheist wrote:

The Revenue will only charge VAT on an item which has never had VAT charged on it anywhere in the EU.

My reading (and understanding) of VAT throughout Europe as well.

But differs from:

(QUOTE)
You have to pay Vat somewhere. For most things you can choose where you want to pay the VAT (within the EU I mean) the country of purchase or the country of use. Interestingly, if you buy a car you must pay the Vat in Ireland if you are going to use the car here. Before you will be able to register the car Vat will have to be paid.

My mistake if I misunderstood the above to mean: "if you've paid VAT in a EU country, you'll still have to pay a VAT differential in Ireland if you're going to use the car in Ireland".

Where the outburst came from (particularly after replies to my subsequent query, confirming of my -possible- misunderstanding as detailed)

Dades

I dunno, man.

They both read the same to me.
It's only stating that you can choose to pay the VAT in the country you will be using the product.
And then that you have to pay the VAT in the country you are importing to.

*shrug*

MrPudding

OK just to clarify. The VAT thing only applies to new cars. Example: I buy a new car in Northern Ireland. I cannot pay the VAT there so I must buy it VAT free and arrange to pay the VAT down here. You do not pay the VAT differential, you only pay the vat once but you *must* pay it here.

MrP

ambro25

So my understanding was correct - cue "Donald Duck moment", I'm back to being incensed :mad:

MrPudding

ambro25 wrote:

So my understanding was correct - cue "Donald Duck moment", I'm back to being incensed :mad:

If your understanding is that when you buy a new car for use in Ireland you must pay the VAT in Ireland, then yes your understanding is correct.

You do not however have to pay vat twice or pay a differential. You will need to buy the car vat free in the country of purchase as you have to pay the vat here.

MrP

ds20prefecture

The Atheist wrote:

But businesses with turnovers of a certain amount can claim back VAT, so therefore it isn't added to the price of a car before you pay it.

Ah, but my understanding is that the VRT is calculated on the after-VAT price - sure the distributor reclaims the VAT, but the consumer is paying VRT on 121% of the base car price. This is the slight of hand.

ambro25

ds20prefecture wrote:

Ah, but my understanding is that the VRT is calculated on the after-VAT price - sure the distributor reclaims the VAT, but the consumer is paying VRT on 121% of the base car price. This is the slight of hand.

Not a slight of hand in the least, I'm afraid. Just a tax within a tax, a nice earner for the IE governement, and totally in breach of EU fundamental principles... But then that's the purpose of rules, isn't it? For governments to break them when it suits :mad:

I remember when the French gvt introduced a 'special taxation regime' for expatriates. Couldn't do diddly-squat about it, as it was gvt-sanctioned extortion writ large: 25% tax on first cent of income, no tax-free thresholds or allowances whatsoever. Introduced by vote on 31/12/98 (I think, for the year), put into action 01/01/99. It was, IMHO, in total breach of EU Human Rights (at a stretch, but still...) = financially penalised for living overseas.

Only solution left for me to sell absolutely everything and move all capitals o/seas - and put some students out in the street in the process
Gvt did that to attempt to stop the 'brain drain' - only problem is, expatriates did have brains indeed, so instead the gvt lost on tax revenue overall as most everybody else did the same - serves 'em right, f*ckers, see me cry

VRT should be treated the same. And (conspiracy theorists ahoy!), when you think about it, if VRT income is so important to the IE gvt, what is their incentive to improve public transport?

BTW, ds20prefecture - c'est quelle préfecture, le dépt 20?

ds20prefecture

ambro25 wrote:

BTW, ds20prefecture - c'est quelle préfecture, le dépt 20?

No, my car is a DS20, an ex-government model (modèle administration or "Préfecture")

ambro25

Nice

528i

The abolition of vrt could result in a depreciation (in real terms) of maybe 25% on most peoples cars overnight.. suddenly a dealership could have 2-3million wiped off the secondhand value of his forecourt, relatively speaking it may be easier to trade up as everyone\car is exponentially affected and largely on the same boat, but you'd feel alittle hard done by all the same. I'd prefer to keep paying extortionate taxes if only to keep the little man from reaching the next rung on the prestige car ladder.

Ps. what is it with the citroen DS prewhat'sya'callit ? it looks like an anaesthetised myxomatosised frog who just woke up from surgery to find his hind quarter strapped to a miniature rocket :eek: <-not unlike dis fella

ds20prefecture

528i wrote:

Ps. what is it with the citroen DS prewhat'sya'callit ? it looks like an anaesthetised myxomatosised frog who just woke up from surgery to find his hind quarter strapped to a miniature rocket :eek: <-not unlike dis fella

I'm not sure - it might be style or art, depending on your perspective. Both would be alien concepts to a driver of the average "executive" or "distinguished" brand. Is it your first time seeing one? I suppose they're not that popular among the hordes of middle management.

There's nothing to be frightened of, it's just a little different. What do you drive, or like me is your user ID a hint?

ambro25

528i wrote:

I'd prefer to keep paying extortionate taxes if only to keep the little man from reaching the next rung on the prestige car ladder.

...and Beemer drivers wonder why other drivers generally put them all in the "pompous pr*ck" bag

528i wrote:

Ps. what is it with the citroen DS prewhat'sya'callit ? it looks like an anaesthetised myxomatosised frog who just woke up from surgery to find his hind quarter strapped to a miniature rocket :eek: <-not unlike dis fella

...and tie a knot on the bag, then lob it in the Liffey

528i

ok maybe that came across all wrong, what I meant to say (to help ameliorate commonly preconceived notions regarding the big baddie bmw driver) was that it would somehow seem improper or unpalatable to have every commie goat-humping scrote in the country suddenly being able to afford a (once considered) luxury or distinguished marque, as a result of vrt abolishment, and then having less money in government coffers to lock them up when they inevitably abused the privilege. Its simply unimaginable and i'd prefer the status quo, as do the government- albeit for fiscal rather than personal reasons.

ps. Mr. Citroen DS sympathiser, what does it matter if I were driving a fiat sei, chiq, chiwawai (or whatever that sardine can is called), its only an opinion (which one shouldn't really feel compelled to substantiate by virtue of what they drive) at the end of the day, but considering 'style' or 'art' could conceivably extend to great big lumps of cow dung juxtaposed against le rusty french tin cans and a couple of fogged up headlamps in a harmonious although visually obtrusive setting within a modern art museum thesedays, I think its unwittingly apt.

ds20prefecture

528i wrote:

ps. Mr. Citroen DS sympathiser, what does it matter if I were driving a fiat sei, chiq, chiwawai (or whatever that sardine can is called), its only an opinion (which one shouldn't really feel compelled to substantiate by virtue of what they drive) at the end of the day, but considering 'style' or 'art' could conceivably extend to great big lumps of cow dung juxtaposed against le rusty french tin cans and a couple of fogged up headlamps in a harmonious although visually obtrusive setting within a modern art museum thesedays, I think its unwittingly apt.

I was not asking (or indeed compelling) you to substantiate an opinion, I was asking what you drove. It was an attempt to be friendly, obviously another alien concept. Can you only interact with people by attempting to bait them into worthless argument? That must be very rewarding for you. Or could it be that you wish to perpetuate a stereotype of BMW drivers by appearing arrogant, aggressive, narrow minded and ill-informed?

ambro25

Couldn't have put it better, DS20Préfecture

528i wrote:

ok maybe that came across all wrong, what I meant to say (to help ameliorate commonly preconceived notions regarding the big baddie bmw driver) was that it would somehow seem improper or unpalatable to have every commie goat-humping scrote in the country suddenly being able to afford a (once considered) luxury or distinguished marque, as a result of vrt abolishment.

Why? It's a free country and free market. Are you saying that you would feel demeaned? Time for an ego-check, me thinks.

528i wrote:

ps. Mr. Citroen DS sympathiser, what does it matter if I were driving a fiat sei, chiq, chiwawai (... etc.)

Nothing whatsoever, since I believe what one drives, whether a Polo or a Ferrari, does not particularly entitles one to mock what others drive. Your opinion in respect of DS is indeed your own, as is mine to diss you for it
I don't particularly 'like' the aesthetics of the DS, but I have immense respect for the automobile technological breakthroughs (many, many of those) they represented at the time and -thankfully some are left- still perpetuate today, with much better road manners than still many a new '05 car.

ds20prefecture

ambro25 wrote:

Couldn't have put it better, DS20Préfecture

Thank you Ambro, but perhaps I was mistaken.

I realise now that 528i is merely trolling for newbies. This is (in my experience) typically the action of the insecure - a childish way to establish some pecking order in a given community. I joined 1 month later than 528i, therefore it is most important to 528i that he/she appears more dominant than I by manipulating a given thread into inflamatory arguments, thereby showing that he/she is more familiar with this community. E.g. a thread on VRT turned into a ludicrous extremist rant about preserving social strata. Also, if 528i elicits an angry response or "flame" then that might make up for some lack of attention elsewhere in his/her life. As with a spoiled child, better to ignore than respond.

Often a troller will espouse an extreme and contrarian view in order to bait someone who might agree into posting something revelatory. Indeed, 528i's posts have to date been a caricature of the common stereotype of BMW owners.

Most online communities actively discourage the practice of trolling, as it tends to stifle the growth and activity of the community. This is normally acheived through the moderator - are the moderators active in this forum?

528i

Lads, no offense, but can you try to stay on topic here [VRT] instead of heading off in various tangents about bmw drivers, alfamale psychology, social strata and,.. art

ds20prefecture

528i wrote:

Lads, no offense, but can you try to stay on topic here [VRT] instead of heading off in various tangents about bmw drivers, alfamale psychology, social strata and,.. art

q.e.d.

528i

okay, if I apologise for offending your beloved citroen, will you.... wash my car ? /just kidding..

Here's a link to get things back on topic once again (before anyone mentioned those amphibious french thingies that can look round corners)

https://www.ros.ie/VRTEnquiryServlet/ShowVRT

no porsche or ferrari options as yet, but gives a good indication of the market value (as well as vrt rates) to your current car, or potential import etc.

TheLedge

Good God, what have I started!!

It has been a joy to read your collectively brilliant use of the english language however!

Any journalists/solicitors or English graduates in the house then??

ambro25

528i wrote:

https://www.ros.ie/VRTEnquiryServlet/ShowVRT

Good God m'lad! If I counted how many times this link has been posted in this Forum... :rolleyes: ...it'd be a lot

ds20prefecture

528i wrote:

https://www.ros.ie/VRTEnquiryServlet/ShowVRT

no porsche or ferrari options as yet, but gives a good indication of the market value (as well as vrt rates) to your current car, or potential import etc.

Interesting - My friend recently bought an immaculate 02 320dSE from the uk for €20,000. According to this, it worth about €27000, and he got stiffed for about €8300. I wonder are there examples where the estimated price is below the market value?

CBG has 02 320Ds from 28000 to 35000 so he's a little ahead of the game.

Lord Nikon

If i was any self-respecting car manufacturer, and I was told that i could sell a shed load more products than i am already, if a certain EU country would remove a "Tax", the first thing I would be doing is lobbying the **** out of said government.

It would be even sweeter if the tax was illegal.

Dades

neuromancer wrote:

If i was any self-respecting car manufacturer, and I was told that i could sell a shed load more products than i am already, if a certain EU country would remove a "Tax", the first thing I would be doing is lobbying the **** out of said government.

And the first thing they'd do if the tax was removed would be to up their prices :rolleyes:

The consumer would be lucky to see much of a difference.

Robertr

Just to add insult to injury, from Revenue website:

"In the case of a new means of transport i.e. land vehicles (excluding agricultural tractors) that were supplied six months or less after the date of first entry into service or have travelled 6,000 Kilometres or less, VAT is chargeable and normally payable at the time of registration in the State, even where there is evidence, e.g. an invoice, that VAT was paid in the country of purchase."

So if you try to import a second hand car from the UK that is less then 6 months old you have to pay the VAT again!!!!!!!

I think you can claim the VAT back from the UK Government but it takes a few years!!

peasant

Camper vans, motorhomes ...everybody go and buy camper vans or motorhomes.

VRT "ONLY" 13.5%
Nobody (including insurances) cares whether they're RHD or LHD, so you can buy all over the EU.
As long as you stay under 6 Liter you can have any engine for 79 Euro road tax.
Insurance (club membership scheme) currently somewhere under the 500 Euro mark.

sorry, no BMW campers, though

MrPudding

This is what I have been saying. Bit of a pisser, and illegal as far as I know.

The simple option is not to pay the VAT in the UK. Then you don't have to try to claim it back.

MrP