Dáil Éireann Debate, Wednesday - 25 March 2026
46. Deputy Mark Ward asked the Tánaiste and Minister for Finance the way in which the Revenue Commissioners calculate the NOx component of VRT to be greater than zero euro on a used imported car first registered elsewhere in the EU before January 2020, given that the NOx component of VRT did not exist in Irish law before that date (details supplied); and if he will make a statement on the matter. [22864/26]
Amharc ar fhreagraVRT is an excise duty which is imposed, under Irish law, on the registration of a vehicle in the State. Finance Act, 1992 (as amended) sets out the legislative framework for vehicle registration and the charging and collection of Vehicle Registration Tax (VRT). Under this legislation, the method of calculating VRT is the same regardless of whether the vehicle is new or has been imported second-hand from another EU Member State or a third country.
VRT on category A vehicles (generally passenger cars) is assessed based on the value of the vehicle and its emissions levels for carbon dioxide (CO2) and nitrogen oxide (NOx). The CO2 component of the VRT charge is a percentage of the vehicle’s Open Market Selling Price (OMSP), ranging from 7% for a vehicle with zero CO2 emissions, up to 41% of the OMSP for vehicles with the highest emission levels. The NOx component of VRT is calculated using a progressive scale, starting from €5 up to €25 per mg/km of the vehicle’s NOx emissions level. As a result, the total VRT charge increases according to the emissions output of the vehicle involved and its market value.
Article 110 of the Treaty of the Functioning of the European Union (TFEU) provides that Member States cannot levy taxes that discriminate against imported goods or provide unfair protection to domestic goods. The Court of Justice of the European Union (CJEU) has ruled that the charging of a tax such as VRT is within the competence of a Member State provided that it does not breach Article 110 of the TFEU. The majority of other EU Member States operate broadly similar vehicle registration taxes to Ireland’s VRT.
In line with successive programmes for Government and most recently the “Programme for Government 2025: Securing Ireland’s Future”, the Government is fully committed to the emissions reduction targets set by the Climate Action and Low Carbon Development Act. The annual Climate Action Plans set out a pathway that seeks to deliver on this and to implement the adopted carbon budgets and sectoral emissions ceilings. Linked to this climate policy stance, Ireland’s taxation regime for vehicles has developed a strong environmental rationale, and since 2008 both VRT and Motor Tax are calculated on an emissions basis which incentivises the move to lower emission cars. In the case of VRT, such development has been effected through changes to the VRT rates and charging structures implemented through Finance Acts in the past number of years and through the introduction of a separate charge on nitrogen oxide (NOx) emissions in section 50 of Finance Act 2019.
The NOx charge was introduced, in the public interest, for the purpose of discouraging the sale of highly polluting vehicles: NOx emissions contribute to climate change and have harmful consequences for public health, including increased risk of respiratory problems and dementia. Such charges are allowed for under EU law provided that they are proportional.
VRT legislation is kept under review having regard to the development of the tax and developments in EU law. In this context, the impact of relevant court judgements is considered, and in situations where it is concluded that change to existing national legislation would be appropriate, detailed legislative proposals are developed for policy decision.
