Caitríona Redmond: What you need to know about the new €3 per item customs duty

Watch where you order from online, because if your item is coming from outside the EU, it’s about to get more expensive.

Now is the time to consider any subscription boxes or memberships consumers may be receiving from overseas, advises Caitríona. 

At the end of last month, the Revenue Commissioners issued a news release that has started to create havoc among Irish fans of online shopping.

Until now, items valued at €150 or less, purchased from outside the European Union, were not subject to customs duty.

From July 1, a new customs duty of €3 per item in a parcel will apply to goods bought online from non-EU countries, including the United Kingdom.

You should take note of this because if your parcel contains unique or distinct items, they will be charged at €3 per item, according to the Revenue Commissioners.

Let’s take a look at the original example the EU provided when announcing the new duty framework.

Example:

A parcel contains 1 blouse made of silk and 2 blouses made of wool.

Therefore, due to their different tariff sub-headings, the parcel contains two distinct items, and €6 in customs duty should be paid.

Considering ordering from outside of the EU?

That could become extremely expensive in just a few weeks, especially if you place multiple orders. If you order 10 identical t-shirts, which arrive in a single package, you would be charged only €3. If you order 10 different items, the duty on that parcel would be €30.

Why the change?

This is due to an EU piece of legislation designed to ensure fairness for Irish and EU businesses. It’s designed to encourage us to shop within the EU, rather than spend our money elsewhere.

Some websites will collect the duty at the point of sale. In that case, the €3 duty will be shown to you, and the total price you pay at the checkout will be the final price with no extra charges applied on delivery. 

Other websites may not collect duty at checkout. If so, the delivery company (which could be the post or a separate courier) will send you a message to pay duty per item before your goods can be delivered. The delivery company will also charge a handling fee, which could be as much as €6.95 per parcel, meaning the cost of international small-value packages may increase dramatically, depending on their contents.

Remember, not all Irish websites are based in Ireland. We have seen a rash of spurious websites, many based in China and elsewhere, pop up across the internet lately. I have written about this before and explained that you need to be extremely careful when buying from websites with Irish-sounding names and authentic-sounding sob stories.

With some geographically misleading websites, consumers may not realise there is a duty due until a demand for payment arrives before delivery.

Small packages valued at under €150 have been a major business for international companies, with 91% of small shipments to the EU in the past year coming from China. According to the European Commission, the volume of small packages has doubled every year since 2022, and last year, 4.6 billion such packages entered the EU market.

Even if each of those packages contained a single distinct type of item, it would equate to potential gross revenues of €13.8 billion for the EU under this customs charge. The total is likely to be higher, as Shein and Temu’s high-volume, low-cost business model means customers order a number of cheap items that arrive in one bundle.

What about members or subscribers of Amazon based in the UK?

Amazon.ie launched in Ireland to great acclaim about a year ago, and some subscribers would have kept their Amazon.co.uk membership. With the new customs charge coming in, it is time to shift your loyalty from the UK website to the Irish website to avoid paying additional customs charges. For Amazon.co.uk, if the product is already in an Irish warehouse, the additional charge will not apply. However, it makes far more sense to subscribe to Amazon.ie and avoid the risk of incurring the additional charge.

What should Irish consumers do?

Now is the time to consider any subscription boxes or memberships consumers may be receiving from overseas. If your preferred retailer hasn’t been in touch yet to discuss the issue, reach out to them to ask for clarity. Request an update on whether you’ll be charged at source, or whether you’ll have to pay a service fee on delivery, as well as the additional customs charge.

Pause before placing any small orders outside the EU and consider whether you really want the product. The distinct or unique item rule can significantly increase the cost of any order, so bear this in mind before ordering.

What about refunds?

Check the website returns policy as you may not receive a refund of customs duties or VAT paid on the initial delivery.

Where a consumer changes their mind about the purchase and returns items, the €3 customs duties will not be refunded.

However, customs duties on items will be refunded by Customs Authorities if the goods are faulty.

REDMOND RECOMMENDS

As schools begin to wrap up for the year, the CCPC has written to schools, reminding them that school uniforms can place unnecessary stress on families and undermine competition.

Making school uniforms more affordable is a simple swap from pre-stitched crested jumpers and jackets to a crest that can be attached to a generic clothing item. The clothes are still the same colour, yet cost a lot less, and the crest can be reattached to larger sizes as students grow.

This system has been extremely effective for many schools, and if your school has not already implemented this change, get in touch with them to ask. The price difference can be as much as €30 per item of clothing, and I’m sure that’s money you could put to good use elsewhere.