I do a lot of online shopping. What are the tax implications of buying products from outside the EU?
Online shopping is increasingly popular and in the run up to Christmas its popularity increases as a result of shoppers looking for bargains online.
It is helpful to know of the value of non-EU goods one can purchase before import duties i.e. Customs duty, VAT and excise duty, become payable:
- If you import goods from outside the EU, you will have to pay VAT if the value of the package is over €22. VAT will be calculated on the full item value and not just the value above the allowence.
- If the goods are over €150 in value, 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.
- If someone sends you a gift from outside of the EU and it is valued at under €45, there is a relief from payment of import duties. In order to qualify for this relief the gift must be of an occasional nature and sent from one private individual to another.
Online shoppers should also be cautious about websites that offer to undervalue your goods in order to avoid these import 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 are in fact shipping their products from outside the EU. Where this is the case, the shopper is liable to the duties and VAT.