Charlie Weston: 'Be wary when buying online'
Almost 90,000 people were hit with the taxes and duties last year when they had goods delivered to their doors from outside EU'
Published 06/11/2015 | 02:30
WITH Christmas coming, thousands of people will be buying presents online.
But the tax authorities have warned consumers that they are likely to be hit with VAT and customs duty charges if they buy goods online that are coming from outside the EU.
Whether it is a new pair of designer jeans, a digital camera, an iPad Air, a new smartphone or toys, the temptation to buy online is strong. There is often a perception that buying on the internet is better value.
However, quite often people do not factor in tax and duties imposed by the Revenue Commissioners - something that can wipe out any gains from buying online.
Revenue now has tax and customs officials in all the main parcel depots and they are not adverse to opening packages to check where they came from, and if they are counterfeit.
The EU is a free-trade area, which is a designated group of countries that have agreed to eliminate customs duties, quotas and preferences on goods and services traded between them.
If you buy from an EU website there will be no customs duties, and the VAT should be applied to the price you are quoted.
But outside the EU, it is a different matter.
Revenue said that almost 90,000 people were hit with the taxes and duties last year when they had goods delivered to their doors from outside the EU.
The taxation body raised €2.1m in customs duties and value added tax (VAT) from parcels coming into Ireland last year. Charges were applied to 88,280 packages, mainly on doorsteps when parcels were being delivered.
Goods imported from outside the European Union are subject to VAT if the value is over €22.
Where goods are valued at more than €150 then customs duty may also be payable, depending on the type of goods and the country of origin.
The duty is charged on the full value of the goods plus the cost of postage, packaging and insurance.
But if someone is sent a gift from outside the EU, and it is valued at under €45, there is a relief from payment.
However the gift must be of "an occasional nature and sent from one private individual to another".
Revenue also warned online shoppers to be cautious about websites that offer to under-value your goods, in order to avoid paying duties.
"This is illegal and shoppers should be aware that, as the importer of the goods, they 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 Revenue said they can still be shipping their products from outside the EU, meaning the shopper is liable.
The tax and duties can be considerable.
Revenue gave an example of an Elsa Doll (three-pack) which is sold from a US website for $183 (€164).
It will cost $70 (€62.78) for post and packaging. This means the value for customs duty purposes is €226.90. The customs duty is applied at a rate of 4.7pc, which works out at €10.66. Revenue said VAT at 23pc will add €54 to the cost. Along with a €7 An Post handling fee, the total cost will be €299.19 - almost double the original price.
A pair of designer jeans, retailing for €210, will rise to €319 if it is bought from outside the EU and has VAT and customs duty imposed on it - there is VAT of 23pc on such an item and customs duty of 12pc.
If this package is delivered to your door by a courier or an An Post employee, then expect to have to shell out €92 in charges before the package containing the jeans is handed over to you.
Then there is counterfeit goods. Last year some 10,000 goods were seized. Typically, these items were sports shoes, handbags, cosmetics and watches.
Not only will Revenue and Customs seize the goods, you will also end up out of pocket for the money spent on them.
This means you should only use trusted or well-known websites.