Breakdown of Prices in Ireland and the UK

The retail price of a car in Ireland consists of the pre-tax price, a value added tax (VAT) of 21 per cent on the pre-tax price…

The retail price of a car in Ireland consists of the pre-tax price, a value added tax (VAT) of 21 per cent on the pre-tax price, and a Vehicle Registration Tax. The Vehicle Registration Tax is not based on the pre-tax price, but on the "open market selling price," or OMSP. This is a price regularly given to the Revenue Commissioners by the motor trade. The VRT is determined as 22.5 per cent of OMSP, not the pre-tax price. The Revenue Commissioners say the OMSP should represent approximately 90 per cent of the actual retail price.

In effect, this means that VRT represents more than 30 per cent of the pre-tax price, not 22.5 per cent as the rate suggests. A sample of a range of cars shows the VRT represents 31.9 per cent (52.9 per cent less 21 per cent VAT) of the pre-tax price for the Opel Corsa and Volkswagon Golf and 39.8 per cent for the Audi A4. In the United Kingdom and Northern Ireland, cars are taxed at 17.5 per cent of the pre-tax price.