Finance Act 1992 section 135E

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

Section 135E provides for the proportionate payment of vehicle registration tax (VRT) on category A vehicles temporarily brought into the State under a cross-border lease arrangement with a business in another EU Member State.

• Where a category A vehicle is leased from an EU-based business for between 1 and 48 months, only a proportion of the full VRT is payable upfront, calculated by applying a percentage rate (from 2% for 1 month up to 54% for 48 months) to the net VRT liability
• If the lease is extended (remaining under 48 months total), the lessee must notify Revenue in writing and pay additional VRT plus daily interest at 0.0274%, and if the vehicle ceases to qualify without being removed from the State, the full remaining VRT and interest become immediately payable
• When the vehicle is removed from the State at the end of the lease, a final reconciliation is carried out comparing the VRT already paid against the actual depreciation in the vehicle's value over the lease period, with any overpayment refunded and any underpayment collected
• An administration charge of €100 applies both at the time of the initial application and when the vehicle is examined prior to removal from the State, and a vehicle that ceases to qualify where the additional duty has not been paid or the vehicle has not been removed is liable to forfeiture