Finance Act 2018

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Proportionate payment of vehicle registration tax on certain vehicles temporarily brought into State

41. Chapter 4 of Part 2 of the Finance Act 1992 is amended by inserting the following section after section 135D:

“135E. (1) In this section—

‘lease agreement’ means a lease agreement within the meaning of paragraph (c) of the definition of ‘qualifying vehicle’;

‘period of the lease agreement’ means the shortest continuous period of calendar months (including any part of a calendar month) which comprises the full period of use of the vehicle, the subject of the lease agreement concerned, by a person resident, or a person (other than a natural person) established, in the State;

‘qualifying vehicle’ means a vehicle—

(a) that is a category A vehicle,

(b) that has never previously been registered under section 131,

(c) that is the subject of a lease agreement—

(i) in respect of a vehicle which is temporarily in the State, and

(ii) which is of a period of between at least 1 calendar month, or part thereof, and a maximum of 48 calendar months,

completed between a person resident, or a person (other than a natural person) established, in the State and a business established in another Member State, where the business in that other Member State is—

(I) registered under section 65 of the Value-Added Tax Consolidation Act 2010 , and

(II) at the time of declaration of the vehicle for registration under section 131, the holder of a current tax clearance certificate issued in accordance with section 1095 of the Taxes Consolidation Act 1997 ,

and

(d) which shall be registered in the name of a person resident, or a person (other than a natural person) established, in the State;

‘removed from the State’ means—

(a) examination of the vehicle under the provisions of section 135D(1), and

(b) proof that the vehicle has been registered in another Member State or has been permanently exported outside the European Union, under section 135D(3)(b).

(2) When a person applies to register a qualifying vehicle under subsection (2) of section 131, the Commissioners may collect part of the charge to the duty of excise due under subsection (3) of section 132 in respect of the period of the lease agreement.

(3) Where subsection (2) applies, the charge applying at the time of registration of the vehicle shall be calculated in accordance with the following formula:

(V - X) x P

where—

V is the duty of excise payable under subsection (3) of section 132 when the vehicle was first declared for registration,

X is any other remission or repayment of vehicle registration tax or relief from vehicle registration tax available in relation to the vehicle at the time of registration, and

P is the relevant percentage rate applying to the period of the lease agreement specified in the Table to this section.

(4) Where a vehicle ceases to be a qualifying vehicle, other than where the vehicle is removed from the State, the balance of the duty of excise not collected under subsection (2) and the interest payable under subsection (7) become due and immediately payable.

(5) Where—

(a) the period of the lease agreement has been extended,

(b) the lease remains in the name of the person declared at first registration of the qualifying vehicle under section 131, and

(c) the total period of the lease agreement remains under 48 months,

then the person mentioned in paragraph (b) shall immediately declare in writing this change to the Commissioners and pay—

(i) the additional duty of excise due as calculated in accordance with subsection (6), and

(ii) the interest due, if any, at a rate of 0. 0274 per cent.

(6) The additional duty of excise due under subsection (5) shall be calculated in accordance with the following formula:

((V - X) x P) - A

where—

V is the duty of excise payable under subsection (3) of section 132 when the vehicle was first declared for registration,

X is any other remission or repayment of vehicle registration tax or relief from vehicle registration tax available in relation to the vehicle at the time of registration,

P is the relevant percentage rate applying to the period of the lease agreement, inclusive of any period or periods of extension of the lease agreement under subsection (5), specified in the Table to this section, and

A is the duty of excise calculated at the time of registration under subsection (3) and any periods of extension of the lease agreement under subsection (5).

(7) The duty of excise due in accordance with subsections (4) and (5) shall be increased by an amount calculated in accordance with the following formula:

A x P x N

where—

A is the duty of excise due in accordance with subsection (4) or (5),

P is 0. 0274 per cent, and

N is the number of days from the date the vehicle was first registered under section 131 to the date when the terms of the lease agreement were varied.

(8) (a) In respect of a qualifying vehicle that is removed from the State, at the end of the period of the lease agreement, the duty of excise liability shall be established in accordance with subsection (9) and any overpayment shall be repaid to the person who paid the duty of excise and any underpayment of the duty of excise shall be charged and paid to Revenue by the person declared at first registration of the qualifying vehicle under section 131.

(b) Notwithstanding paragraph (a), the amount to be repaid, if any, shall not exceed the amount of vehicle registration tax paid on the registration of the vehicle under section 131.

(9) The duty of excise liability under subsection (8) shall be calculated in accordance with the following formula:

(A - B) - C

where—

A is the duty of excise due under subsection (3) of section 132 when the vehicle was first declared for registration less any other remission or repayment of vehicle registration tax or relief from vehicle registration tax available in relation to the vehicle at the time of registration,

B is the duty of excise due under subsection (3) of section 132 to register the vehicle on the last day of the period of the lease agreement less any other remission or repayment of vehicle registration tax or relief from vehicle registration tax available in relation to the vehicle, and

C is the duty of excise due under subsection (3) of section 132—

(a) as calculated in accordance with subsection (3), and

(b) the additional duty of excise (if any) calculated in accordance with subsection (6),

of this section.

(10) Interest shall apply to the duty of excise liability calculated under subsection (9) and shall be calculated in the same manner as provided for in subsection (2)(b) of section 135D.

(11) The duty of excise liability under subsection (8), if any, shall be due and payable to Revenue, by the person declared at first registration of the qualifying vehicle under section 131, on the last day of the period of the lease.

(12) Subject to section 105BA of the Finance Act 2001 , and without prejudice to the provisions of section 960H of the Taxes Consolidation Act 1997 relating to the offset of overpayments, where the duty of excise liability calculated under subsection (9) results in an overpayment, following the deduction of the administration charge in subsection (13), in favour of the person who paid the duty of excise, that person may make a claim for repayment of such amount.

(13) An administration charge of €100 shall be payable at the following times:

(a) at the time of the making of an application under subsection (2);

(b) when the qualifying vehicle is examined prior to being removed from the State.

(14) Where a vehicle—

(a) ceases to be a qualifying vehicle, and

(b) the additional duty in respect of the vehicle has not been paid in accordance with subsection (4) or the vehicle has not been removed from the State,

such vehicle shall be liable to forfeiture.

(15) This section shall come into operation on such day or days as the Minister for Finance may appoint by order.

TABLE

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