EU ruling could see higher tolls on the M50
Higher road tolls could be on the way for motorists who use the M50 and Dublin Port Tunnel.
The European Court of Justice has ruled that VAT should be applied to bills.
Private car owners currently pay between €2.10 and €3.10 to use the M50, and between €3 and €10 for the Dublin Port Tunnel. Both roads are owned by the State, through Transport Infrastructure Ireland (TII).
Following the European ruling, an opinion from the European Advocate General said the State must apply VAT in the same manner as private operators, which is likely to result in higher tolls.
The dispute stems from 2009 when a private car park operator took Ireland to court, claiming it had failed to correctly implement the VAT directive by not obliging local authorities to levy VAT on fees to use publicly-owned car parks.
This, it was argued, skewed competition because local authorities could charge cheaper rates.
The previous year the National Roads Authority (now TII) took over the M50 and said it received confirmation from the Revenue Commissioners that VAT was not applicable on any tolled roads it operated. In May 2010 - following the car parks ruling - TII was directed by Revenue to apply VAT on the M50 and Port Tunnel.
The State did not increase the tolls to reflect the VAT, but instead decided to include it the existing rates.
In February 2013, TII appealed Revenue's decision to the Appeal Commissioner, which referred it to the European Court of Justice. A full ruling is expected in October,
Last year, TII remitted €17m in VAT to the revenue. Around €70m has been remitted to date.
No additional exchequer funding was provided to TII to make up the shortfall, which meant the money was taken from the roads budget.
Sources said that if the court upholds the opinion, higher tolls might have to be introduced on both roads to make up for the shortfall.
The level of increase is not known. The Government could decide to raise the roads maintenance budget to avoid affecting motorists.
TII said it could not make any public comment until it had seen the judgment, but said the opinion was "not helpful".