VRT on imports inflated
IMPORTERS OF second-hand cars to the Republic are missing out on millions of euro each year in vehicle registration tax (VRT) reductions, figures obtained from the Revenue Commissioners have revealed.
Reductions in VRT are available to those who successfully appeal the level of VRT calculated by the Revenue Commissioners, which are based on what the Revenue calculates to be the "open market selling price" of the vehicle in the Republic.
Figures obtained from the Revenue Commissioners by The Irish Times reveal that in 2007, some 98,353 used vehicles were imported and registered in the State. Of these, just 540 cases appealed the VRT assessment.
But the figures also reveal that, of the 540 appeals, 409 were successful, indicating that the Revenue Commissioner's estimate of the open market selling price is significantly inflated.
The success rate of appeals would support research published in last week's Motors which showed that the Revenue's open market selling price estimate was consistently significantly higher than that of vehicles offered for sale on websites carzone.ie and autotrader.ie. Examples of cars for sale showed a Saab 9-3 Aero was overvalued by as much as €13,000; an Audi A4 by more than €7,000 and a VW Passat by almost €3,000.
Yet the number of importers appealing revenue valuations, at 540, represents just 1 per cent of the total number of used vehicles imported into the State in 2007. Given the figures, the collective overpayment by importers is likely to be in the millions.
In response to the situation, the Revenue Commissioners clarified their comments of last week to point out they request the advice of the motor industry here only for the open market selling price of new vehicles. A spokesman said price setting of new vehicles was nevertheless subject to Revenue approval.
In a statement, the Revenue Commissioners said: "In the case of . . . all used vehicles, open market selling prices are determined by Revenue on the basis of regular review of market values. Where Revenue receives information that a value may be inaccurate, the relevant value is reviewed."
One possible reason for the low take-up of the appeals process may be the requirement in Section 147 of the Finance Act 2001 that the VRT duty must be paid before the appeal.
Unless the duty is paid in the first place, the appeal commissioners have no powers to assess a claim for a reduction.