The VRT makes up a significant part of the price that you are quoted at your motor dealers. This VRT is a tax applied by the Revenue Commissioners based on what is called the Open Market Selling Price (OMSP) of the car.

Currently there are three VRT bands or rates and they are determined by the size of the car engine as measured in cubic centrimetres (cc's). New cars with smaller engines up to 1400cc pay the lowest rate at 22.5%, cars between 1400 and 1900cc in engine size pay a rate of 25%, while all cars with bigger engines pay 30%. (Table 1)

These same rates also apply to used cars imported into Ireland, where the Revenue Commissioners apply a rate depending on their valuation of the car.

Under the new car taxation system, which comes into effect on July 1st, this three band rate of VRT will be replaced by a seven band rate from Band A to Band G. These bands are based on the CO2 emissions produced by the car's engine (Table 2). These new VRT rates will also apply to used cars imported from abroad from July 1st.

The CO2 rating of your car is also closely related to its fuel economy figure. The CO2 rating is a rating produced by the car company in compliance with EU regulations, so there has been a standard figure for all new cars produced for a number of years. This is because similar car taxation systems have been applied in other EU countries.

Table 1 - Current VRT Car Taxation System Rates

Table 2 - New VRT Car Taxation System Rates

Hybrid and bi-fuel cars

For hybrid electric and bio-fuel car the existing VRT relief scheme expires on 30 June 2008. From 1 July 2008 the relief for such cars will be adjusted to give a relief of up to €2,500 on the VRT payable. This means that the VRT rate is calculated based on the emissions and then an additional €2,500 is taken from the VRT rate to decide on the new car price. This will make the purchase of a hybrid car especially attractive after July 1st.

As these cars have a low level of CO2 emissions many of them will be paying the lowest annual road tax level of just €100.

Comments (0) »

Show/Hide comment form

Name

Email

Title

Comment

Write the displayed characters

Add Comment