(July 17, 2015)

On July 16, 2015 the European Commission issued a pres release announcing that it is referring Ireland to the Court of Justice of the European Union because according to the Commission the Irish car tax applied to rented and leased vehicles is not in line with EU rules.

According to the Commission, Ireland is currently infringing EU law in the way it applies tax to vehicles that are either rented or leased. Under EU rules, car tax should be levied on Irish residents according to the precise duration that the vehicle is leased in another Member State, provided that the duration can be determined (e.g. on the basis of a leasing or rental contract).

The Commission is of the opinion that Ireland is infringing the European Union law by levying the full amount of car tax, even though the amount levied in excess is refunded at a later stage, once the vehicle is registered in another country.  According to the Commission the Irish legislation creates a disproportionate obstacle to the freedom to provide services for leasing and rental companies in other Member States that wish to offer their services to Irish residents.

According to the press release on February 27, 2015 the European Commission sent a request taking the form of a reasoned opinion to Ireland, asking Ireland to amend its legislation. As the national legislation was not amended, the case is now being referred to the Court of Justice of the European Union

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