EU rules aspects of VRT are illegal

The European Court of Justice has ruled aspects of vehicle registration tax are effectively a form of double taxation.

The court has ruled this is illegal under the EU treaty.

The ruling was welcomed by the European Commission which has called for the abolition of the tax.

The Commission said states should ensure that their VRT systems did not impose a double taxation burden on those importing second hand cars from member states.

The ruling may affect the operation of Vehicle Registration Tax in other states, notably Denmark and Ireland, which also charge high rates of VRT.