The European Commission has formally requested Ireland to modify how motor vehicles less than 3 months old are taxed to comply with EU law. According to the Commission, Ireland imposes a higher motor tax on cars of less than 3 month old which are imported from other Member States than it imposes on similar motor vehicles originating in Ireland. EU rules are breached if the amount of tax levied on an imported second-hand vehicle is higher than the tax incorporated in the value of similar second-hand vehicles already registered in a national territory.
The EU Court of Justice has established that a vehicle starts to lose its value as soon as it is bought or brought into use. According to EU case law on car taxation, the amount of tax due cannot exceed the amount of tax supported by similar vehicles that are already registered in the national territory. However, under Irish law vehicles which are less than 3 months old or cars which have travelled less than 3000 km bear the same tax burden as new vehicles.
The request takes the form of a reasoned opinion which is the second stage of an infringement procedure. If the rules are not brought into compliance within two months, the Commission may refer the matter to the Court of Justice of the European Union.
For further details see here.