Industry News
Irish vehicle registration tax to be CO2-linked in 2008 budget
7th December 2007
Ireland’s current Vehicle Registration Tax system uses engine size as the criterion to determine the VRT rate to be applied to a car at the point of registraton. Under the revised VRT system lower emission cars will attract reduced VRT rates and higher emission cars will be liable to higher rates applied to the ‘Open Market Selling Price’ of the car, with effect from 1 July 2008.
CO2 Emission Bands A-G (as in the UK) and VRT rates under the revised system will apply a rate of 14% to cars in Band A – 0-120 g/km) rising in increments to a maximum 36% rate for Band G cars emitting 226g/km and over.
An existing 50% VRT relief scheme for series production hybrid electric vehicles and flexible fuel vehicles is being extended in its current form from 1 January 2008 until 30 June 2008, at which point the revised VRT scheme based on CO2 emissions will be implemented. From 1 July 2008 the relief for series production hybrid electric and flexible fuel cars will be adjusted to provide a relief of up to €2,500 on the VRT payable, in addition to the benefit of the new VRT CO2 emission related system. This relief will apply until 31 December 2010.
Series production electric cars and electric/battery-assisted bicycles are being exempted from VRT with effect from 1 January 2008. A revised scheme of capital allowances and leasing expenses for cars used for business purposes is also being introduced, linked to CO2 emission bands broadly consistent with the new VRT system.
A meeting of EU Member States last month failed to reach unanimous agreement on a Commission plan to harmonise all EU car taxes on the basis of CO2 emissions linkage, but France has joined Ireland in following a lead established by the UK.
(www.irlgov.ie/)
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