CO2 System

Moving to a CO2 based system for cars

Motor tax for cars is currently based on the engine capacity of the vehicle. The amount of motor tax you pay relates to the size of your vehicle engine - the more powerful your vehicle, the higher the cost of your motor tax. For new cars registered from 1st July 2008, motor tax charges will be determined on the basis of the CO2 emissions level, based on seven CO2 bands. Rates will range from €120 a year for the greenest cars to €2,350 for cars with the highest emissions rating.

New cars registered between 1st January 2008 and 30th June 2008 will initially have their motor tax charged on the basis of engine size. If it is beneficial for these cars to switch to the CO2 based motor tax system, this will happen on the first renewal of motor tax after 1st July 2008. New cars which are registered in the first 6 months of 2008 whose tax would be more under the CO2 based system will continue to pay motor tax on the basis of engine size.

The new CO2 based system will not apply to second-hand imports that were registered abroad prior to 2008.

The aim of the new motor tax system is to encourage the use of smaller, cleaner, fuel-efficient cars in the fight against climate change by reducing the emission of carbon dioxide (CO2) from cars to help protect the environment and improve local air quality.

Cars registered before 1st January 2008 will continue to pay motor tax on the basis of engine size.

How is the method of calculating Motor Tax changing?

For all new cars registered from 1st July 2008, motor tax charges will be determined on the basis of the CO2 emissions level, based on seven CO2 bands. Charges will range from €120 a year for the greenest cars to €2,350 for cars with the highest emissions rating. Rates: Motor tax rates will be graduated as one moves up the CO2 bands, as follows:



i.             NEW PRIVATE CARS registered on or after 1 July 2008 (Category M1 only)

ii.             NEW PRIVATE CARS registered between 1 January 2008 and 30 June 2008 where motor tax is based on CO2 emissions (Category M1 only).

Band

CO2 emissions- grams per km

Annual

Half-year

€*

Quarterly

€!

Arrears Monthly

€#

A0

0

120

66

33

12.00

A1

1-80g

170

94

48

17.00

A2

More than 80g/km up to and

including 100g/km

180

99

50

18.00

A3

More than

100g/km up to and including 110g/km

190

105

53

19.00

A4

More than 110g/km up to and

including 120g/km

200

111

56

20.00

B1

More than 120g/km up to and including 130g/km

270

149

76

27.00

B2

More than

130g/km up to and including 140g/km

280

155

79

28.00

C

More than 140g/km up to and including 155g/km

390

216

110

39.00

D

More than 155g/km up to and including 170g/km

570

316

161

57.00

E

More than 170g/km up to and including 190g/km

750

416

211

75.00

F

More than

190g/km up to and including 225g/km

1,200

666

339

120.00

G

More than

225g/km

2,350

1,304

663

235.00

 

 

 

*55.5% of the annual rate (disregard

cent)

!28.25% of

the annual rate (disregard cent)

#1/10 of the annual rate (disregard cent after

multiplication)

 

       

Which vehicles does the new system apply to?

A new car, which is, registered by the Revenue Commissioners for vehicle registration tax on or after 1st July, 2008 as a category A vehicle i.e. passenger cars.

New cars registered between 1st January 2008 and 30th June 2008 will initially have their motor tax charged on the basis of engine size. If it is beneficial for these cars to switch to the CO2 based motor tax system, this will happen on the first renewal of motor tax after 1st July 2008. New cars which are registered in the first 6 months of 2008 whose tax would be more under the CO2 based system will continue to pay motor tax on the basis of engine size.

What is the legal basis for this change?

The Motor Vehicle (Duties and Licences) Act 2008 which was enacted on 26th March 2008.

What about cars registered before January 2008?

Cars registered before 2008, including imports, will continue to be taxed in future years under the existing motor tax system related to engine size. (c.c)

How will the level of CO2 be known?

Before a new model is put on sale in Europe, it must undergo a series of tests to ensure that it has achieved approved standards regarding safety, environmental impact, etc. This process is called Type Approval and each car achieving the approved standards is issued with a Certificate of Conformity. Among the details included on the Certificate of Conformity is the level of CO2 emissions of the car. This is the information that will be used for taxation purposes for both vehicle registration tax (VRT) and motor tax.

This CO2 rating will be captured initially by the Revenue Commissioners at vehicle registration tax stage and passed on to the national vehicle file for use in connection with the administration of the motor tax system. In the absence of a Certificate of Conformity and the Revenue Coommissioners not otherwise being satisfied as to the CO2 rating of a car by reference to any other supporting documentation, the motorist will be required to pay the highest motor tax rate. The same approach will apply to VRT.

What happens to cars registered between January 2008 and June 2008?

New cars registered between 1st January 2008 and 30th June 2008 will initially have their motor tax charged on the basis of the existing engine size (c.c.) system. However, a low CO2 emitting new car registered between 1st January 2008 and 30th June 2008 will have its motor tax switched to the lower CO2 based motor tax rate on first renewal of motor tax post 1st July 2008, (when the new CO2 based system commences). New cars which are registered in the first 6 months of 2008 whose tax would be more under the new CO2 based system will continue to pay motor tax on the basis of engine size (c.c.).

What happens to 2008 cars registered abroad and subsequently registered in Ireland on or after 1st July 2008?

Cars registered outside of the State on or after 1st January 2008 and subsequently registered in the State on or after 1st July 2008 will have their motor tax based on the new CO2 system. Imported cars which were registered abroad before 2008 will continue to be taxed in future years under the existing motor tax system related to engine size. (c.c)

Will there be two separate systems for taxing a car?

Yes. From July 2008 there will be two separate tax systems for cars. Cars under the existing motor tax system will continue to be taxed based on engine size (cc). New cars registered from 1st July 2008 will be taxed based on their CO2 emissions level. New cars registered in the first six months of 2008 will be switched to the CO2 system on first renewal of motor tax after July 1st 2008, if the new CO2 tax rate is lower.

Why introduce a new system?

The clear objective of the new motor tax system is to influence the purchasing decisions of consumers by rewarding the buyers of low-emitting cars. Purchasers of cars with low CO2 emissions will be rewarded while a premium will be charged on vehicles with high CO2 emissions.

How will I know if the car I am thinking of buying is a clean car?

The Department is introducing a labelling system for cars. This label will be similar to the label on white goods e.g. household appliances and will show the level of CO2 emissions from the car. It will also give information such as the vehicle registration tax rate and the motor tax rate for the car. All garages and motor dealers must display the label for each car offered for sale.

For information regarding changes in Vehicle Registration Tax please contact the National Car Testing Service