Motor vehicles

Motor vehicles sold in the State are liable to Value-Added Tax (VAT) at the standard rate.

In addition to VAT, Vehicle Registration Tax (VRT) is also liable when a motor vehicle is being registered in the State for the first time.

The rate of VRT varies between vehicle types and is mainly dependent on the level of CO2 emissions. VRT is payable on new unregistered vehicles and also on vehicles brought into the State from other countries.

The VAT and VRT procedures involved when buying and selling motor vehicles may vary depending on the status of the buyers or sellers.

These may be:

motor dealers
traders buying or selling their own business vehicles
motor auctions
private individuals.

There are also special procedures for transactions involving second-hand vehicles, or vehicles being transported between countries as part of a purchase or sale.

As well as vehicle sales, VAT is also due on any work on motor vehicles such as:

repair
maintenance
hire and leasing.

How VAT and VRT should be paid in different transactions, and the circumstances in which these taxes may be reclaimed, are set out in further guidance in VAT and VRT on motor vehicles.

Margin scheme

The margin scheme is used as a means of reducing the possibility of double taxation on the sale of second-hand goods. This scheme is optional.

It operates by allowing dealers to pay Value-Added Tax (VAT) on the difference between the sale price and the purchase price of the goods.

The margin scheme applies to:

certain second-hand goods
works of art
antiques and collector’s items
second-hand vehicles and second-hand agricultural machinery acquired by dealers as stock-in-trade on or after 1 January 2010.

If you choose not to operate the margin scheme, then the normal VAT rules apply.

Further guidance contains more detailed information on the VAT treatment of the margin scheme.

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