Vat & vrt

M

Mr R

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9
Can anybody explain the order these are added to a new vehicle?

As I understand it; vrt is charged on the omsp (open market selling price)
I would take omsp to be a vat inclusive price.
In that way the tax is compounded. i.e. There is a tax on paying tax.

Or are both percentages calculated on the pre-tax value?

2 scenarios.....

If a car costs 10,000 excluding tax - vat is 23% - lets say vrt is 15%
is it....

a. 10,000 +23% vat = 12,300 + 15% vrt = 14,145
or
b. 10,000 +23% vat = 12,300 + 1,500 (15% of 10,000) = 13,800

Hope somebody can clear this up.
Thanks
 
Does this help ?
Value-Added Tax (VAT) charges on new vehicles bought and sold by an authorised motor dealer In general, VAT is due (at the standard rate) on the full purchase price received by a dealer for any vehicle. However, in the sale of an unregistered vehicle by an authorised dealer, Revenue will accept that the portion of the purchase price that represents the VRT liability is paid by the dealer in the name and on the account of the purchaser; i.e., the customer pays the VRT, and the dealer simply administers the payment from the money handed to him or her. Accordingly, the VAT liability on the sale of a new vehicle by an authorised motor dealer is generally calculated on the VRT-exclusive amount received from the customer. (This also applies in the case of a second-hand or used vehicle brought into the State by an authorised dealer, and sold by him or her prior to being registered in Ireland.) In the case of the sale of a registered vehicle, a VAT liability arises on the full VRT-inclusive amount received, and no adjustment is allowed.
 
So,if the OMSP is exactly the same as the retail price,then scenario a would fit the bill.
 
Thanks guys. The below is my real reason for asking.
If you can shed any light I'd be very grateful.

I was recently awarded a primary medical cert (as a driver) and I'm trying to figure out how much of a budget I have to work with.
I will be shopping in the used car market and my budget will be around 10k (plus vat & vrt)
The problem is, I don't know what this actually equates to in the real world. How much of my purchase will be refunded?

My question has 2 parts. VRT & VAT

(note: I've consulted the revenues website as well as citizens information and many other sources so please don't refer me to them. They are all quite vague and do not answer my questions)

1. VRT
Just for example..... I've seen a car for around €15,000. (right in line with revenue's omsp estimate)
I ran it through the revenue vrt calculator and it estimates vrt at €3,000.
(20% vrt rate on €15,000 estimated omsp)
Can I take this number to be accurate? Will revenue use this calculator alone or will they consider the price I paid.
Let's say (for arguments sake) I was a shrewd haggler, and I purchased the very same car for €4,000 ....
would my VRT rebate still be €3,000, because that's what the calculator says? Or will it be 20% of €4,000?

2. VAT
Revenue (Monaghan office) told me that I would also be entitled to a VAT refund on a used car, but when I asked him to elaborate he dismissed me and told me to "go ask a garage, they'll tell you". It was Friday at 3:30 and I was an inconvenience.
I've spoken to many car dealers recently and they all (but one*) told me emphatically that this was not true. "There is no vat on used cars and vat cannot be reclaimed."
Which is this true? Can I claim back residual VAT on a used car?

If it's true, how is this calculated?
Going back to my fictional car....
I buy a car for €15,000
will the 23% be deducted from this?
or will the VRT be deducted first....
15,000 - 3,000 = 12,000
Then, vat be deducted from this value.

*The one car dealer who didn't, referred to "vat qualifying" cars.
i.e. cars that have never had vat handled on them. Such as fleet cars, ex-rentals, etc. which have never been privately owned.
These cars come with vat invoices and are tax deductible.
Any truth to this?

Many thanks in advance guys.


Update:
I went to irishstatutebook.ie
and found this:
"8. (1) Where a person satisfies the Revenue Commissioners that that person is a disabled driver and has borne or paid value-added tax, vehicle registration tax or residual vehicle registration tax in respect of a vehicle or in respect of the adaptation of a vehicle which"

This refers to
1) VAT
2) VRT
3) Residual VRT

There is no mention of residual VAT so I assume that the guy from Revenue was mistaken.
This goes back to the 'vat-qualifying' vehicles. Surely if one had a vat receipt, one could reclaim that vat under the scheme.
 
Hope this helps;
There is no VAT on second hand goods-including cars. There is AFAIK no such thing as residual VAT. Therefore you cannot recoup any VAT.
You pay VRT based on the Revenue calculations (OMSP)-not what you paid.

These questions have all been asked before in some shape or form. However your particular situation is a variant of this. I would not dismiss the revenue site as being vague-the legislation govening the application of VAT and VRT is there.
 
Thanks Laternau. I appreciate the tips. Good to know.
However, I stand by what I said re the revenue site being vague.
I had to go to the statute book for the full story.
 
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