FAQ Friday: What do I need to know about the new VAT changes when shopping online?

July 2, 2021

Each month, we share the answer to one of the most frequently asked questions (FAQ) from the hundreds of consumers who contact us. This week we take a look at the new changes to VAT on online orders and what they mean for you when shopping online.

Remind me, when do additional taxes and charges apply to online orders?

When shopping online from businesses based outside of the EU, additional taxes and charges apply to orders. As the UK is no longer part of the EU customs union, this also includes online orders from UK businesses. This means that the same charges that apply to online orders from other non-EU based businesses (such as China, the US etc.) now also apply to orders from the UK (excluding Northern Ireland). The three most common added charges are VAT, customs duty and customs processing fees. The cost of any additional charges will depend on the value, type and origin of the goods you buy. Click here for more information.

What do the new changes mean?

Before 1 July 2021, there was a VAT exemption on orders of less than €22 from non-EU online businesses. This exemption has now ended. When you shop online from businesses based outside of the EU (including businesses in Britain) you will have to pay VAT on all eligible orders, regardless of their value.

What about customs and excise duty?

The rules around customs duty and excise duty remain the same. Visit our Brexit and online shopping hub for more information.

How will I know if Irish VAT is included in the price?

When shopping online, you need to check whether the advertised price includes any international taxes and duties due before you make your decision to buy. This is particularly important when shopping from a business based outside of the EU.

Businesses can opt to pay any taxes and charges that are due in advance, which means that the order will arrive as normal and you won’t have to pay any further charges when the goods are delivered. This is sometimes called the ‘duty paid’ model.

If a business chooses not to pay these taxes and charges in advance, then you will receive a bill for any taxes and charges that are due after your package comes through customs. You will have to pay these charges in order to receive your goods. You will usually pay these charges through the transport or courier company who will also charge you an administration fee.

What about my online orders from outside the EU that have yet to arrive?

If you ordered goods valued at €22 or less before 1 July that arrive after that date, you will have to pay VAT on eligible goods. VAT must be paid on imported items at the same rate that applies in Ireland for similar goods. Visit revenue.ie for details on the different rates that apply. This is to ensure that goods imported from outside the EU do not have a preferential VAT rate over those ordered from within the EU, including Irish retailers.

Remember!

A website address is not always an indication of where a business is based. For example, a website which ends in ‘.ie’ doesn’t mean it’s based in Ireland. Check where a business is located before you buy online – don’t just rely on a ‘.ie’ website address or prices in Euro (€). Check on the website for a registered business address, usually found in T&Cs, Privacy Policy or on the Contact Us page.

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