Do I Pay VAT on VRT?

Addressing the common "Tax on Tax" confusion for Irish vehicle imports.

The Short Answer

No, you do not pay VAT on the VRT amount itself. Vehicle Registration Tax (VRT) is a separate tax collected by Revenue when a vehicle is registered. It is not a service or a good that attracts VAT.

Where the Confusion Comes From

The confusion often arises because VAT is charged on Customs Duty. If you are importing a vehicle from Great Britain (post-Brexit), the calculation order is:

Import Tax Calculation Order

  1. Customs Duty (10%) is calculated on:
    (Vehicle Price + Shipping + Insurance)
  2. VAT (23%) is calculated on:
    (Vehicle Price + Shipping + Insurance + Customs Duty)
  3. VRT (Variable %) is calculated on:
    The OMSP (Irish Market Value), completely separate from the purchase price taxes.

So, while you pay "Tax on Tax" regarding VAT on Customs Duty, VRT is calculated independently based on the Irish Open Market Selling Price (OMSP) and is exempt from VAT.

Example: Importing a Car from the UK

Separately, Revenue assesses the VRT. If the car is worth €18,000 in Ireland (OMSP) and is in a 19.25% VRT band:

The VRT is simply added to your total cost. It is not taxed again.

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