Revenue has warned online shoppers of potential additional costs when buying goods online from outside the EU.
The message comes in the lead to one of the busiest times of the year for buying goods and gifts online.
It has reminded consumers to check whether the advertised price of goods includes all tax and duty costs before deciding to buy.
Where the price advertised is not inclusive of these costs, additional charges, including VAT and Customs Duty, can apply once the goods arrive in Ireland.
Two significant changes came into effect earlier this year, which are impacting the cost of online shopping.
Ms Maureen Dalton, Head of Revenue’s South-East Frontier Management Branch, explained their implications:
“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 July 1st, last, new VAT rules for goods arriving into Ireland from non-EU countries came into effect. This means that all such goods are subject to VAT regardless of their value.”
Avoid unexpected additional charges
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. This is 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, she explained 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.”
Further additional charges
Ms Dalton further explained the additional charges that can arise:
“On July 1st, 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; you will have to pay €5.40 VAT before the jumper is delivered to you.”
More than €150
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.
She urged consumers to know 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.”
Also, she said consumers need to remember that, separate to import taxes and duties, it is normal practice for parcel operators also to charge an administration fee.
She advises consumers to check administration fees before making a purchase, as they can vary.