3 Tax Saving Rules When Importing a Vehicle from UK to Ireland

Prior to Brexit importing a car from the UK to Ireland was pretty straightforward from a tax perspective. The only tax you had to pay was VRT. If you wanted to know how much it was going to cost you to import a car from the UK, you simply added VRT to the UK purchase price.

Due to Brexit importing a vehicle has become a lot more complex from a tax perspective. Now there are 3 taxes you need to pay when importing a vehicle. The taxes are as follows:

1. VRT
2. VAT
3. Customs Duty

At VRT.ie we have identified 3 tax savings rules you should follow if you don’t want a hefty tax bill when importing a vehicle from the UK to Ireland. The rules are listed in order of importance.

If you want to calculate the taxes for a vehicle you are importing then…..

Did you know when importing a car to Ireland from the UK you must now complete a customs declaration…..

Rule 1: Pay Low VRT on Low Emission Cars

Potential Saving: Thousands

VRT can be as low as 7% for low emission vehicles and up to 37% for high emission vehicles. In addition to this a Nox levy of up to €600 is chargeable on high emission petrol cars and up to €4850 on high emission diesel cars. Therefore, if you buy a low emission car then your VRT could be as low as 7% and your Nox levy will also be low. In fact, if you buy an electric vehicle your total VRT can come to €0 when the VRT reliefs for electric vehicles are taken into account. On the other hand if you buy a high emission diesel then your VRT could be 37% plus a Nox levy of €4850.

Rule 2: Don’t Pay VAT Twice.

Potential Saving: 20%

As a result of Brexit you must pay VAT of 23% when importing a vehicle from the UK to Ireland. It doesn’t matter if VAT has or has not been paid in the UK, you must still pay VAT of 23% in Ireland. How does one avoid paying VAT in the UK? In the case of many cars for sale in the UK the VAT was paid on the cars when they were bought new therefore its not possible to buy these cars excluding UK VAT. These cars are known as VAT margin cars. However if a VAT registered business in the UK owned the car then UK VAT has never been paid on this car, these cars are known as VAT qualifying vehicles. Given VAT in the UK is 20%, it should be possible to buy a VAT qualifying car in the UK for 20% less than a VAT margin car. You will most likely have to buy a VAT qualifying car from a car dealer in the UK and they can only sell the car excluding UK VAT if the car is being exported from the UK.

Rule 3: Pay Zero Customs Duty.

Potential Saving: 10%

Typically when you import a car from the UK you will be required to pay 10% customs duty. Please note for motorcycles customs duty is typically 6% and for some goods vehicles it can be either 10% or 22%. There are 2 scenarios under which you are not required to pay customs duty.

Rule 3 Scenario 1: UK Origin

Firstly if a car is manufactured in the UK it will likely be considered UK origin and will qualify for preferential origin and a customs duty rate of 0%.

Rule 3 Scenario 2: Returned Goods Relief

Secondly if a car is imported to the EU within 3 years of being exported from the EU it will quality for returned good relief and be subject to 0% customs. If a car was exported from Germany in 2019 and imported to Ireland in 2021 then it will qualify for returned goods relief and 0% customs. So typically if you buy a car less than 3 years old in the UK it will qualify for returned goods relief. A key thing to be aware of is this relief is based on when the car was imported to the UK, not the date of registration so just because it was registered less than 3 years ago it doesn’t mean it will get the relief.

If you want to calculate the taxes for a vehicle you are importing then…..

Did you know when importing a car to Ireland from the UK you must now complete a customs declaration…..

The Rules in Action

Now let’s see the rules in action with 3 examples with cars that break the rules and cars that obey the rules. The really show the rules in action, the same make and model of car will be used but all other aspects are different. These examples are based on real cars for sale in the UK on 27th September 2021.

Example 1: 2009 Skoda Fabia Diesel versus 2019 Skoda Fabia Petrol

In the example below, you will see the net tax on a 2009 Skoda Fabia is a whopping €5278 (151%) whereas the net tax on a 2019 Skoda Fabia is €2588 (26%)

Car	Purchase Price	UK VAT Refund	Sterling Price	Euro Price	Co2 Emissions	CO2 VRT Charge	Nox Emissions	NOX Levy	Customs Duty	VAT	Total Irish Tax	UK VAT Refund	Net Tax	% Tax
2009 Skoda Fabia 1.4 TDI (VAT Margin)	£3000	£0	£3000	€3478	120	€350	204	€3700	€347	€880	€5278	0	€5278	151%
2019 Skoda Fabia 1.0 TSI (VAT Qualifying)	£10000	£1666	£8333	€9663	106	€2189	22	€110	€0	€2222	€4521	€1932	€2588	26%

Example 2: 2009 Volkswagen Golf Diesel versus 2019 Volkswagen Golf Electric

In the example below, you will see the net tax on a 2009 Volkswagen Golf is a whopping €4003 (115%) whereas the net tax on a 2019 Volkswagen Golf is €550 (3%)

Car	Purchase Price	UK VAT Refund	Sterling Price	Euro Price	Co2 Emissions	CO2 VRT Charge	Nox Emissions	NOX Levy	Customs Duty	VAT	Total Irish Tax	UK VAT Refund	Net Tax	% Tax
2009 Volkswagen Golf 2.0 TDI (VAT Margin)	£3000	£0	£3000	€3478	120	€350	153	€2425	€347	€880	€4003	€0	€4003	115%
2019 Volkswagen Golf E (VAT Qualifying)	£19000	£3166	£15833	€18361	0	0	0	0	0	€4223	€4223	€3672	€550	3%

Example 3: 2017 Audi A6 Diesel versus 2020 Audi A6 Hybid

In the example below, you will see the net tax on a 2017 Audi A6 is a whopping €12278 (81%) whereas the net tax on a 2020 Audi A6 is €4681 (14%)

Car	Purchase Price	UK VAT Refund	Sterling Price	Euro Price	Co2 Emissions	CO2 VRT Charge	Nox Emissions	NOX Levy	Customs Duty	VAT	Total Irish Tax	UK VAT Refund	Net Tax	% Tax
2017 Audi A6 2.0 TDI Ultra (VAT Margin)	£13000	0	£13000	€15075	114	€4782	143	€2175	€1507	€3814	€12278	0	€12278	81%
2020 Audi A6 50 TFSI (VAT Qualifying)	£34000	£5666	£28333	€32856	39	€3696	0	0	0	€7557.05	€11253	€6571	€4681	14%

If you want to calculate the taxes for a vehicle you are importing then…..

Did you know when importing a car to Ireland from the UK you must now complete a customs declaration…..