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EU seeks change to 'unfair' VRT system

THE price of imported cars could fall thanks to a new EU ruling that nearly new cars should not be taxed as highly as brand-new ones.

The European Commission yesterday requested Ireland change how it taxes imported cars less than three months old or face being taken to the European Court of Justice.

They found that levying Vehicle Registration Tax (VRT) at the same rate for brand-new cars and for those under three months old is unfair.

This is because it does not take account of how much a car's value falls as soon as it is driven off the forecourt -- often falling in value by €3,000 to €4,000 because it no longer has the status of new.

The EU Commission said that meant those buying imported secondhand cars were being taxed at a higher rate than those buying secondhand cars where the lower tax is effectively built into the buying price.

The VRT on typical new family cars is often around €6,000 or €7,000 -- meaning buyers could potentially save hundreds of euro if the Government complies with this formal request.

It could also spark an increased trade in secondhand demonstration cars to Ireland.

Thousands of garages in the UK would have nearly new demonstration models that are sold off for less than the original price.

Irish Independent