Bringing a car into Ireland: What you need to know when it comes to tax

Brexit appears to have put the brakes on what had been a healthy trade in importing cars into the Republic from the UK. But with a severe shortage of used cars in Ireland, some are still considering this channel.

And then there is the position of people who are returning home permanently, many from the UK, with their cars. How do they deal with vehicle registration tax? And more importantly, the necessary paperwork?

Broadly speaking, there are three separate taxes that you can face when you bring a car into the Republic – Customs Duty, VAT and VRT (vehicle registration tax). Which apply depend on where the car is coming from, whether it is a new or used vehicle and your own personal circumstances.

Customs Duty

You will have to make a customs declaration unless you are just bringing the car into the Republic from Northern Ireland or the EU, but that does not necessarily mean a tax bill.

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If you’re bringing a new car in from Britain, you will not have to pay customs as long as the car was manufactured in the UK. If, however, the car came from elsewhere – the US or Japan, say, or even the EU – you will face a bill for duty of 10 per cent of the vehicle’s value plus the cost of shipping it.

If you’re just bringing the car over the Border, make sure that a customs declaration was made when it was first brought into Northern Ireland.

When it comes to importing used cars from Britain, you will face customs duty.

You’ll also face a customs charge if the car is coming into Ireland directly from outside the EU or wherever the car first enters the EU.

Customs is payable at the point of entry. That’s down to you to declare and pay the amount due if you are importing the vehicle personally – or the responsibility of any shipping company acting on your behalf.

Confusing, yes? To make matters worse, there is a relief from custom’s duty on your car if you are moving home permanently, but we’ll come back to that later.

VAT

We’re well used to paying VAT on most goods so it will come as little surprise to hear that the tax will apply on car imports.

Levied at the standard 23 per cent rate, it applies on all new and used cars coming into the Republic from Britain and other countries outside the EU – but not on used cars bought in Northern Ireland (as long as the paperwork shows it was properly imported into Northern Ireland in the first place) or elsewhere in the EU.

If you are bringing in a new car acquired elsewhere in the EU, VAT will apply as long as one of the following applies: the car is less than six months old or has fewer than 6,000km on the clock.

Again, there is VAT relief for people moving here from the UK, of which more later.

VRT

Every car brought into Ireland has to be registered and, unless you have an exemption, it will be subject to vehicle registration tax (VRT), which is charged on the basis of carbon dioxide and nitrogen oxide emissions as a percentage of something called the open market selling price of your vehicle (basically the recommended retail price, inclusive of all taxes).

The higher the car’s emissions, the higher the charge. On CO2 emissions, it ranges from 7 per cent to 41 per cent of the car’s open market selling price, which obviously varies depending on make, model, age and condition. NOx charges are a flat euro rate in three bands depending on the milligrams of NOx per kilometre, or kilowatt hour up to a maximum of €4,850 for diesel cars and €600 for others.

Failure to register your car within 30 days of bringing it into the State can land you in a world of trouble – with the possibility of your motor being seized by Revenue. On a less dramatic end of the scale, you could face needless financial penalties.

You register your imported car through the National Car Testing (NCT) Service by making an appointment within seven days of the car arriving in the State as you would for your regular NCT check.

There are several documents you’ll need to complete the registration: these include a Vehicle Purchase Details form, called VRTVPD2, completed by you, as well as the car’s logbook (its registration document, also called a V5C in case anyone asks for it by that name) and an invoice showing when the car was bought. You’ll also need proof of your own name, PPS number and address (such as a driving licence and a recent bank statement) and, if the car is new, something called a certificate of conformity.

When all the paperwork is done and the required VRT paid, you’ll be assigned an Irish registration plate for your car that you need to have put on within three days. All told, the timelines are pretty tight.

Exemptions

Of course, if you are coming to live in Ireland, or returning home permanently, you can get exemptions from all the taxes above from Revenue provided the car you are bringing into the State with you is your property (ie not subject to a hire purchase agreement), has been in your possession for at least six months and is brought into the State within a year of you moving here.

You will need to show the car’s logbook and evidence showing that you bought it, details of when it arrived in the State and a certificate of insurance as well as evidence that it was previously used abroad – such as a service record or receipts from foreign motor tax. All these details must be submitted via a Transfer of Residence (TOR) application form.

Cars exempted from VRT cannot be sold for a year after arriving in the State, or you will trigger a VRT clawback. Finally, if you were given an exemption within the last five years, you won’t qualify.

You can contact us at OnTheMoney@irishtimes.com with personal finance questions you would like to see us address. If you missed last week’s newsletter, you can read it here. Also, to ensure you continue to receive On The Money, be sure to add the email address you receive the newsletter from to your safe senders list.