Irish shoppers facing higher online shopping bills due to VAT change

All goods arriving in Ireland from non-EU countries — regardless of their value and when they were purchased — will be subject to the new VAT rules.  Picture: iStock

Irish online consumers will be charged more on goods bought from non-EU countries due to new VAT rules which are effective from July 1.

A VAT exemption on goods imported with a value of €22 or less expires at midnight on June 30.

All goods arriving in Ireland from non-EU countries — regardless of their value and when they were purchased — will be subject to the new charge. 

As a result of Brexit, that also includes the UK, meaning a potentially significant hike for shoppers. 

Revenue has said that the new rules, which now apply in all EU member states, will ensure that items imported from outside the EU will not have an advantage in terms of VAT compared with goods bought within the bloc.

"The applicable VAT rate to these goods will be the relevant rate that would apply if the goods were purchased in Ireland," said principal officer in Revenue’s Customs Division, Maureen Dalton.

“Some suppliers operate what is referred to as a duty paid model, meaning the total price paid for the goods at the time of purchase will generally include Irish VAT and any other duties due.

Where this is the case, no further Revenue charges will arise on delivery.

"However, where this is not the case, the amount of VAT and any duties due must be paid to the postal service or parcel operator before the goods are delivered," she said.

Also from July 1, the EU has introduced a special scheme called the Import One Stop Shop (IOSS) which allows suppliers and electronic interfaces selling imported goods to EU customers to collect, declare, and pay the VAT to the tax relevant authorities, instead of having the buyer pay the VAT at the moment the goods are imported into the EU, as was previously the case.

However, use of the IOSS is not mandatory.

As such, Revenue is reminding Irish customers to check whether the advertised price of goods includes all tax and duty costs when shopping online.

"Make sure you are clear on the full cost of a product before you order it online. This will ensure you are not faced with any additional unanticipated charges when you take delivery,” Ms Dalton added.

• Further information on the new VAT rules and the IOSS is available on Revenue’s website.