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Friday 20 January 2017

Online shoppers warned about hidden tax pitfalls of buying goods on internet

Charlie Weston Personal Finance Editor

Published 22/11/2016 | 10:14

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Online shoppers have been warned about hidden tax pitfalls of buying goods on the internet.

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The Revenue Commissioners has warned that all goods from non-EU states are liable to tax and duties.

And alcohol and tobacco have to have tax paid on them whether they come from inside or outside the EU.

The tax authorities also warned that it will seize counterfeit goods, and said these are often dangerous as there are no safety standards applied.

Consumers were warned that what looks like a bargain may turn out to be far less attractive when taxes and duties are imposed when the goods are delivered.

Average tax and duty of €33 was added to more than 70,000 parcels by Revenue officials operating in postal depots nationwide last year.

“All goods from non-EU member states are liable to tax and duty on arrival here,” a spokeswoman for Revenue said.

Mostly there is no tax or duty applied on goods bough with the European Union.

But this is not the case with alcohol and tobacco products.

Drink and tobacco products bought online or by mail order will have tax and duty applied on them whether they are bought inside or outside the EU, Revenue said.

This could mean that what seems like a bargain of 12 bottles of wine for €60, could end up costing €120 once the tax and duty is imposed.

“Excise duty and VAT on an average case of 12 bottles of wine originating in another EU country will add more than €60 bringing the price you actually pay to over €120,” the tax authority warned.

Value added tax of 23pc and varying levels of excise duty apply to alcohol and tobacco products delivered here, even if excise duty was paid in the EU country of origin.

Anyone buying these products online were advised to check with the seller if Irish VAT and excise duty has been paid.

“If the tax and duty has not been paid and the alcohol is seized, you as the buyer are liable,” Revenue said.

For people buying online from retailers outside the EU, Revenue said that if the value is under €22 there is no VAT due.

But if it is valued at more than €22 then VAT is liable on the full value of the item.

If the goods are valued at more than €150 then customers duty will also be due on the full value of the item, which includes the cost of postage and packaging.

No customs duty is due on gifts from outside the EU if the value is under €45.

However, this only applied where the gift but only if the gift is of an occasional nature sent from one private individual to another.

Revenue warned: “Be wary of websites that offer to undervalue your goods to avoid these import duties. This is illegal and as the importer, you are responsible for ensuring that that all duties and taxes are paid.”

Revenue also warned that it seized 138,000 counterfeit goods last year, and it seizes goods it believes to be knock-offs.

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