Hopes that a case brought by a group of Dutch amateur wine importers, which will be heard by the European Court of Justice tomorrow, could end Ireland's punitive Vehicle Registration Tax regime are fading after the Revenue Commissioners said the case would not affect Ireland's VRT laws.
Currently, Irish car buyers looking to save money by purchasing a new car in one of several EU countries where cars are cheaper and then importing the car to Ireland see most if not all of the potential savings wiped out when VRT is levied by the Revenue Commissioners before they allow the car to be registered here. This situation has long been a cause of frustration not only to bargain-hunting car buyers, but also to the European Commission, which has requested several times that Ireland phases out the tax.
A ruling by the European Court will be made in the morning and is expected to go in favour of the Dutch amateur wine importers.
However, Ireland's Revenue Commissioners and the Department of Finance have both said that talk of the end of VRT is poorly advised speculation.
The case causing all the excitement began in January 2005 following a ruling by the Dutch Supreme Court, which found that duty on imported alcohol must be paid on its entry into Holland after a group of Dutch wine enthusiasts bought wine in France in 1997 and paid all applicable taxes there. However, the authorities in Holland insisted that duty was also owing to the Dutch exchequer.
The case was referred to the European Court in Luxembourg, which has been asked to decide whether several articles of Directive 92/12/EEC mean that excise duty can not be levied anywhere except in the country of purchase when a person buys goods for his or her own use and then has them transported to another EU country.
What car buyers are hoping is that if the Court follows the European Advocate-General's advice then, so long as an individual imports a car - even through a third party - for his own use and not for resale, taxes may only need to be paid in the country of purchase.
A spokesman for the Department of Finance confirmed, however, that Irish car buyers should not yet begin searching the internet for cheap new cars. "Tomorrow's ruling will have absolutely no knock-on effect to VRT," he said.