Ireland reforms car tax breaks for disabled persons
24 March 2014
Posted by: Author: Jason Gorringe
Author: Jason Gorringe (Tax-News)
Ireland is to scrap the excise relief on the fuel element of the Disabled Drivers and Disabled Passengers scheme following a ruling by the European Court of Justice, but will ensure that a new grant system is in place when this relief is repealed at the end of the year.
The current Disabled Drivers and Disabled Passengers (Tax Concessions) Scheme provides relief from value-added tax (VAT) and vehicle registration tax (VRT), up to a certain limit, on the purchase of a car adapted for the transport of a person with specific severe and permanent physical disabilities. It also provides an exemption from annual motor tax and a relief from excise on the fuel used in the car.
According to the European Court of Justice, the excise relief component is incompatible with the European Union (EU) Energy Tax Directive, and therefore must be discontinued.
Finance Minister Michael Noonan has taken steps to ensure that beneficiaries will not lose out as a result of the change. He told parliament that there will be "a seamless transition between the two schemes."
Noonan further confirmed that "arrangements will be made during the year to provide for the new fuel grant scheme for disabled drivers, which will have the same levels of support as the current excise relief scheme."
This article first appeared on tax-news.com.