In the lead up to one of the busiest times of the year for buying goods and gifts online, the department of Revenue is reminding consumers to check whether the advertised price of goods includes all tax and duty costs due before making a decision to buy.
Where the price advertised is not inclusive of these costs, then additional charges including VAT and Customs Duty can apply once the goods arrive in Ireland.
Outlining two significant changes that came into effect in 2021 and the impact they have on the cost of online shopping, Ms Maureen Dalton, Head of Revenue’s South East Frontier Management Branch, said:
“Since January last, the United Kingdom is not a member of the European Union. This means that customs formalities and, in certain circumstances, additional charges now apply to goods bought from the UK, excluding Northern Ireland. Also, since 1 July last, new VAT rules for goods arriving into Ireland from non-EU countries came into effect meaning that all such goods are subject to VAT regardless of their value.”
Ms Dalton explained how consumers can avoid unexpected additional charges when their goods arrive in Ireland for delivery:
“If you shop online, whether it be in Black Friday or Cyber Monday sales or more generally for Christmas gifts, you need to check whether the advertised price includes any tax and duty costs due before you make your decision to buy the goods concerned. In some instances, the supplier may operate a duty paid model, where the total advertised price for the goods at the time of purchase includes Irish VAT and duties meaning no further Revenue charges will arise on delivery. However, where this is not the case, the amount of VAT and any duties due will be payable when the goods arrive in Ireland. You will have to pay these charges to the postal service or parcel operator before the goods are delivered.”
Ms Dalton further explained the additional charges that can arise:
“On the 1st of July 2021, the VAT exemption for imported goods with a value of €22 or less came to an end. This means that import VAT is payable on all goods arriving into Ireland from non-EU countries, irrespective of their value. For example, if you bought a Christmas Jumper online last year for €20 from a non-EU country, no VAT or Customs Duty would have applied. This year however, for a similar purchase, VAT at 23% will apply to the cost of the jumper plus the postage or freight cost of bringing the goods to Ireland. In monetary terms this means that, this year, a Christmas Jumper that costs €20 for which a €3.50 postal charge is applied, €5.40 VAT will have to be paid before the jumper is delivered to you.
If the purchase price of the goods alone is more than €150 you will have to pay Customs Duty and VAT. For example, if you purchase a pair of runners from the UK, costing €250, assuming a freight charge of €12, you will pay an additional €84.86 in Customs Duty and VAT.
In concluding her advice to online shoppers, Ms Dalton said:
“Consumers should be aware that no customs formalities apply when shopping online from Ireland or other EU countries. However, if shopping online from a non-EU country, consumers should be aware that where the price of the goods advertised seems attractively low, this may be because tax and duty are not reflected in the price advertised. So, it’s wise to be certain about the real cost of a product before going ahead with ordering online. Consumers also need to remember that, separate to import taxes and duties, it is normal practice for parcel operators to also charge an administration fee. Administration fees can vary so should be checked by consumers before they make their purchase.”
Further information on tax and duty charges that may arise on goods bought online for personal use can be found here on revenue.ie
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