Know Your Rights B: Online shopping and VAT

November / December 2015

Question

I do a lot of online shopping from American websites. What are the rules about VAT and customs duties when shopping outside the EU?

Answer

If you buy goods over the internet or from a mail order catalogue or if you receive goods that have been sent as a gift from abroad you are importing goods. In general when goods are imported into Ireland from a country outside of the EU they become liable to import charges. Import charges include VAT, customs duty and excise or other duties where relevant. In some cases, you can get relief from import charges.

If someone sends you a gift from outside the EU, and it is valued at under €45, you do not have to pay any import charges. To qualify for this relief the gift must be of an occasional nature and sent from one private individual to another. You can buy some goods from outside the EU up to a value of €22 without paying VAT. If your purchase costs more than €22 you must pay VAT. VAT is calculated on the full value of the item, plus postage and duties, and not just the value above the allowance.

If you buy goods from outside the EU valued at more than €150 you will have to pay customs duty as well. Customs duty is normally calculated as a percentage of the value. Customs duty is charged on the full value of the goods plus the cost of postage, packaging and insurance. VAT, customs duty and excise duty are always charged on excisable products (such as alcohol, tobacco and perfume) from outside the EU, whatever their value.

All packages received from outside of the EU require a customs declaration, which is usually completed by the sender. The declaration should include a description of the goods, the value and whether they are gifts or commercial items. Some websites offer to undervalue your goods to avoid import charges. This is illegal. You, as the importer of the goods, are legally responsible for ensuring that the information provided is accurate and that all duties and taxes are paid. Some websites may also promise delivery from within the EU, which would eliminate any import charges, but are in fact shipping their products from outside the EU. If this is the case, you are liable to duties and VAT.

Further information is available from the Citizens Information Centre below.

Know Your Rights has been compiled by Dungloe Citizens Information Service which provides a free and confidential service to the public.

Tel: 0761075430 Address: Dungloe Public Services Centre, Gweedore Road, Dungloe, Co. Donegal

Information is also available online at citizensinformation.ie and from the Citizens Information Phone Service, 0761 07 4000.