VAT & VRT Calculator Ireland

How VAT and VRT Interact When Importing a Car

One of the most confusing aspects of importing a car into Ireland is understanding how VAT and VRT stack on top of each other. The order matters because each tax is calculated on a different base, and getting it wrong can leave you underprepared for the total cost.

The Order of Charges

When you import a car from outside the EU, customs duty is applied first on the purchase price plus shipping and insurance. VAT at 23 percent is then charged on the combined total of the price, shipping, and customs duty. Finally, VRT is calculated on the Open Market Selling Price of the vehicle in Ireland. The OMSP is assessed by Revenue based on what the car is worth in the Irish market, not what you paid for it. This means VRT is independent of the VAT calculation.

Common Mistakes Importers Make

Many importers assume that paying a lower price for the car will reduce their VRT bill. While Revenue does consider the purchase price, the OMSP is the deciding factor. If you buy a car well below market value, Revenue can still assess VRT based on what the car is worth in Ireland. Another common oversight is forgetting that VAT applies to the shipping cost and customs duty, not just the car price. On a 30,000 euro car with 1,500 euro shipping, that extra VAT on the shipping adds another 345 euros to your bill.

• VAT is charged on the total of the vehicle price, shipping, and customs duty together
• VRT is calculated on the Irish OMSP, which is set by Revenue independently
• You cannot recover VRT, but businesses can reclaim VAT on imported vehicles
• Importing from Northern Ireland has different VAT rules after Brexit
• Electric vehicles still attract the full 23 percent VAT rate despite VRT relief

VAT and VRT — What's the Difference?

Most people hear "VAT" and "VRT" and assume they're the same thing. They're not. VAT is Value Added Tax, a standard charge that applies to almost everything you buy in Ireland, from a cup of coffee to a laptop. On vehicles, it's a flat 23 percent. You pay it on new cars from a dealer, on imported vehicles, and on most commercial transactions. The important thing about VAT is that businesses registered for it can claim it back. If you run a garage and buy a van, you reclaim that 23 percent on your next VAT return.

VRT stands for Vehicle Registration Tax, and that one is uniquely Irish. No other EU country has a charge quite like it. When you register a vehicle in Ireland for the first time, whether it's new or imported, Revenue charges VRT based on the car's CO2 emissions. The rate ranges from 7 percent for the cleanest vehicles up to 36 percent for the dirtiest ones. Unlike VAT, you cannot claim VRT back. Ever. It's a one-way charge that funds the exchequer, and it's one of the biggest reasons importing a car can feel so expensive.

Here's what catches people out: these two taxes stack on top of each other. You pay VAT first, and then VRT is calculated separately on the vehicle's Open Market Selling Price. That means on a typical import, you're looking at two separate percentage-based charges, not just one. Our calculator handles both at once so you can see the full picture before you commit to anything.

When You Pay VAT on Vehicle Imports

The VAT situation changes depending on where you're buying from. If you import a car from another EU country, say Germany or France, VAT has already been charged in the seller's country. When the car arrives in Ireland, you still owe Irish VAT at 23 percent. This applies to both new and used vehicles from EU member states. The Irish Revenue Commissioners will collect the VAT when you register the car, even though the original sale already included German or French VAT. You might be able to recover the VAT paid in the other EU country through their refund scheme, but that's a separate process and it doesn't always work smoothly.

Non-EU imports work differently. Cars coming from the UK, the US, Japan, or anywhere else outside the EU face customs duty first, typically 10 percent for vehicles from the UK post-Brexit. Then VAT at 23 percent is applied on top of the car price, shipping costs, and the customs duty combined. So on a 25,000 pound car shipped from the UK with 800 pounds in shipping fees, you'd pay customs duty on the lot, and then VAT on everything including that duty. The numbers add up fast.

One exception worth knowing about: if you're a business registered for VAT in Ireland and you're importing a vehicle for business use, you can claim the import VAT back on your next return. That doesn't apply to VRT, though. Even businesses have to absorb that cost. The margin scheme used by dealers also affects how VAT is calculated, allowing them to pay VAT only on the profit margin rather than the full sale price.

VAT and VRT Cost Examples

Example 1: 2020 Volkswagen Golf from Germany

You buy a 2020 Golf 1.5 TSI for 18,000 euro from a dealer in Munich. Shipping to Dublin costs 650 euro. Because it's an EU import, there's no customs duty. VAT is charged at 23 percent on the total: 18,000 plus 650 equals 18,650, and 23 percent of that is 4,289 euro. The car's CO2 rating is 135 g/km, which puts it in the 16 percent VRT band. Revenue assesses the OMSP at roughly 20,000 euro, so VRT comes to about 3,200 euro. Your total taxes on this car are around 7,489 euro, on top of the original price and shipping.

Example 2: 2019 BMW 3 Series from the UK

A 2019 BMW 320d costs 22,000 pounds from a dealer in Belfast. Shipping is 400 pounds. After Brexit, customs duty at 10 percent applies: that's 2,240 pounds on the 22,400 pound total. VAT at 23 percent then applies to the whole lot, roughly 5,655 pounds. Converting everything to euro at approximately 1.17, you're looking at about 8,700 euro in combined VAT and customs duty alone. The diesel BMW has CO2 emissions of around 120 g/km, putting it in the 14 percent VRT band. If Revenue values it at 26,000 euro, VRT is about 3,640 euro. Your total tax burden sits near 12,340 euro.

Example 3: 2022 Tesla Model 3 from the US

A used Tesla Model 3 Long Range from California costs 32,000 dollars, which is roughly 29,500 euro. Shipping across the Atlantic runs about 2,200 euro. Customs duty on US cars is 10 percent, so that's 3,170 euro. VAT is charged on 34,870 euro total, coming to 8,020 euro. The Tesla's CO2 is zero, so it qualifies for the lowest VRT band at 7 percent. Revenue might assess the OMSP at 38,000 euro, giving a VRT of about 2,660 euro. Total taxes: roughly 13,850 euro. The EV rate saves you several thousand compared to a petrol car of similar value, but the import costs from the US still stack up.

Can You Reclaim VAT on Imported Vehicles?

The short answer is: it depends on who you are and what you're using the car for. If you're a private individual buying a car for personal use, you cannot reclaim the VAT you pay on import. That 23 percent is gone. It's treated the same as VAT on any other personal purchase. You pay it, you absorb it, end of story. This is one of the big differences between importing a car as a private buyer versus as a business.

If you're a business registered for VAT in Ireland, you can reclaim the import VAT on a vehicle, but only if the vehicle is used for business purposes. A plumber who imports a van can claim it back. A company director who imports a car for commuting cannot. Revenue looks at the actual use of the vehicle, not just the nominal business purpose. If you use a business car for private journeys, you may need to adjust the VAT claim to reflect only the business use. Mixed-use vehicles are common and the rules around them are worth understanding before you commit to an import.

There's a catch that trips up a lot of businesses: the VAT margin scheme. If you're a dealer and you buy a used car from a private seller or a non-VAT-registered source, you can sell it under the margin scheme and charge VAT only on your profit margin. But if you import the vehicle yourself, you're typically paying VAT on the full import value at the border. The margin scheme doesn't apply at the point of import. Dealers who import regularly sometimes structure their purchases to minimise this, but it requires careful planning and proper records. If you're not sure how it applies to your situation, it's worth getting advice from a tax advisor before the car lands in Dublin.