Ireland’s electric vehicle incentives were always described as temporary. They are now, visibly, temporary. The €5,000 VRT relief has a legislated end date of 31 December 2026, and the benefit-in-kind relief that has softened company car tax since 2023 halves in 2027 and halves again in 2028. If an EV is in your plans, the calendar has become part of the specification.
The short version
- VRT relief of up to €5,000 for new EVs with an OMSP under €40,000 now runs to 31 December 2026 — extended by one year from its previous 2025 expiry.
- The universal BIK reduction to original market value stays at €10,000 for 2026, then €5,000 for 2027 and €2,500 for 2028.
- From 1 January 2026 zero-emission company cars sit in BIK Category A1, charged at 6–15% of OMV depending on business mileage.
- The BIK taper ends entirely on 31 December 2028.
- None of this changes how VRT is assessed — Revenue still values the car on its own OMSP, not on what you paid.
What is changing
Two separate reliefs are moving on two separate timetables, and they are frequently confused. One is a registration relief that reduces the VRT payable when a qualifying EV is first registered in the State. The other is an employment relief that reduces the taxable benefit on a company car. You can be affected by one, both, or neither.
€5,000
Max VRT relief, to end-2026
€40,000
OMSP ceiling for the relief
€2,500
BIK OMV reduction by 2028
The VRT relief and its end date
Electric vehicles in Ireland benefit from VRT relief of up to €5,000, available on new EVs with an open market selling price below €40,000. That relief was due to expire on 31 December 2025 and has been extended by one year, to 31 December 2026.
It has been extended before, so a further extension in a future budget is entirely possible. But nothing beyond 31 December 2026 is currently legislated, and planning a purchase on the assumption that a relief will be renewed is a decision, not a forecast.
The OMSP trap
The €40,000 ceiling is measured on the open market selling price Revenue determines, not on the invoice you hold. A car you bought abroad for the equivalent of €37,000 can be assessed above the threshold and lose the relief entirely. Check the OMSP before you commit, not after the car lands.
The BIK taper
From 1 January 2026, zero-emission company cars fall into Category A1 for benefit-in-kind, with the charge running from 6% to 15% of original market value depending on annual business mileage — higher business mileage, lower percentage.
Sitting on top of that is the temporary universal reduction to OMV, which applies to cars in categories A–D and to all vans. It is being extended on a tapered basis for three further years of assessment:
| Year of assessment | OMV reduction | Change |
|---|---|---|
| 2026 | €10,000 | Unchanged |
| 2027 | €5,000 | Halved |
| 2028 | €2,500 | Halved again |
| 2029 onwards | €0 | Relief ends 31 December 2028 |
The universal OMV reduction applies to categories A–D and all vans, not to EVs alone.
1 January 2026
EVs move to BIK Category A1
Zero-emission company cars charged at 6–15% of OMV by business mileage band. The €10,000 OMV reduction continues.31 December 2026
VRT relief expires
The up-to-€5,000 relief for qualifying new EVs ends unless extended again in a future budget.2027
OMV reduction halves
Down to €5,000, raising the taxable benefit.2028
OMV reduction halves again
Down to €2,500, its final year.31 December 2028
Taper complete
The temporary reduction ends and BIK is charged on full original market value.
What it costs in practice
The direction of travel is easier to see with a single illustrative car held constant across the three years. Take a zero-emission company car with an original market value of €45,000 and a driver in a mileage band attracting a 12% Category A1 rate.
| Year | OMV | Less reduction | Chargeable OMV | Benefit at 12% |
|---|---|---|---|---|
| 2026 | €45,000 | €10,000 | €35,000 | €4,200 |
| 2027 | €45,000 | €5,000 | €40,000 | €4,800 |
| 2028 | €45,000 | €2,500 | €42,500 | €5,100 |
| 2029 | €45,000 | — | €45,000 | €5,400 |
Illustrative only. Assumes a constant 12% Category A1 rate and no change to OMV. The taxable benefit shown is before income tax, USC and PRSI.
Same car, same driver, same job. A 29% larger taxable benefit by 2029.
The absolute numbers are modest; the trajectory is the point. An employer running a fleet on a four-year replacement cycle is signing up today for a cost base that rises every year of the contract without the car changing at all.
What this does to timing
- If you want the VRT relief, the deadline is real. Registration — not order, not shipping — must happen by 31 December 2026. Sea freight from our Asian and Australasian source markets typically runs to several weeks before you even reach the registration queue, so a Q4 order is already tight.
- Used EV imports need their own calculation. The headline relief is framed around new electric vehicles under an €40,000 OMSP. A used import is assessed on the OMSP Revenue sets for that specific vehicle, so the answer is car-by-car rather than rule-of-thumb.
- Company car decisions should be modelled to 2029. Comparing an EV against a petrol alternative on 2026 BIK alone flatters the EV by roughly the value of a relief that is scheduled to disappear.
- Budget announcements can move all of this. Both reliefs have already been extended or reshaped once. Treat the dates above as the current legislated position, not a permanent one.
The wider context
Ireland is not unusual here. Across Europe, EV incentives introduced to seed adoption are being withdrawn as adoption becomes self-sustaining and as the exchequer notices the foregone revenue. The UK is running the same process through a different mechanism — its ZEV mandate review shifts the obligation onto manufacturers rather than subsidising buyers. The end state in both cases is an EV market standing on its own economics.
Figures are indicative and for guidance only. Actual VRT is charged on Revenue’s OMSP and varies by model, year and mileage. Always confirm current rates and your specific case with Revenue.ie before committing to a purchase.
Working out whether the numbers stack up?
Our Ireland import cost calculator produces a full landed figure — purchase, shipping, duty, VAT and VRT — and our VRT guide explains how Revenue actually assesses the charge. If you want it checked against a specific car, send us the details.
Sources
- Vehicle Registration Tax (VRT) — Revenue.ie
- Calculating Vehicle Registration Tax (VRT) — Revenue.ie
- Electric vehicles in Ireland: tax savings, incentives and what to know — Irish Tax Hub
- Vehicle Registration Tax — motoring information — SIMI