What this about the Government hitting me with more taxes on my online shopping?
There is another charge on online shopping coming down the tracks all right but it is not a Government-imposed one and not a tax. And it won’t apply to all online shopping.
Okay so what is happening?
Well, from later this year, online shoppers using operators based outside of the European Union face a handling fee of about €2.
That is less than the €3 I thought I had to pay?
Oh it is not instead of but as well as the €3 charge that was added to products bought from non-EU-based sellers in July. The combined impact of both will add at least a fiver to many low-cost items bought on platforms such as Temu and Shein and other online retailers outside of the EU.
How will this new charge work?
An Post, which handles a huge number of deliveries that are likely to be impacted, said it was “waiting for clarity around the charge and what it will entail and be levied on”. But a spokesman told The Irish Times that “indications are that the proposed handling fee, which will be a fee rather than a customs duty, aims to cover customs processing costs”.
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And remind me again about that other charge?
Until the start of last month products bought from outside the EU that cost less than €150 did not attract duty under something that bureaucrats in Brussels and tax policy wonks referred to as the “de minimis” rule. That means “of little importance” and it was considered that small items – things that cost less than €150 – were deemed too trivial and too niggly to impose duty on.
That has changed, has it?
The massive growth in online marketplaces – based in China primarily – has caused dramatic upheaval in recent years and all those small parcels that were coming in started to mount up. According to official estimates, about six billion packages with a value of less than €150 came into EU states from outside the European Union last year. That’s about 16 million every day or 200 a second.
What has that meant to shoppers here?
Since July 1st, a €3 charge has been attached to each product the comes from sites outside the EU – even if several products come in the same package. It is not a €3 levy per item but per product category. So, if you buy five white T-shirts, you pay one charge of €3 because they are all the same product. But if you buy one white T-shirt, a pair of sandals and a pair of jeans, each of them will attract the €3 duty, adding €9 on to your final bill.
How has that charge been imposed?
In one of two ways. Most of the big online retailers that are accustomed to doing business with consumers in the EU – the ones that are already levying import charges at the point of sale – will simply add the extra €3 to each different product at their online checkout and that will be that. But smaller retailers – or ones lacking the financial wherewithal – will just sell them and leave it to others to sort out.
Who are these “others”?
In the main, they are the delivery companies. If the duty is not paid at the point-of-sale, delivery companies stop the parcels when they arrive in Ireland and will not deliver them to you until the required duty is paid. The bad news is they will also charge a handling fee of about €7 for doing that, which could see the price of one €5 T-shirt bought online climbing to €15 before you can wear it. And, you will have to pay VAT on the duty too.
So this new handling fee is on top of the existing handling fee?
In a word, yes.
How will I know if I have paid tax on a product or not when I am checking out?
All you need to do is check your bill at the online checkout to see if the duty has been applied. According to estimates from An Post, as many as 95 per cent of online sellers deduct all charges necessary at checkout.
So the thing to do is shop online on .ie websites?
You might think that but you’d be wrong. What matters is not where the site is based or even where the domain registry tells you it is based. What matters is where the product comes from. If you buy on a .ie site that ships from China, then you pay the tax. And if you buy from amazon.ie but the product comes from Britain, you will also pay the tax.
And what about returns? If I buy something and pay duty on it and then return it, will I get my duty and these admin charges back?
No. You will get a refund on the product but, once duty is paid, it is paid, and you won’t be getting it back. And that – along with all the other reasons – is why you might want to think hard about where you are shopping and where the products are coming from.
Is there anything else I should know?
One other thing. Be very careful of scammers in the days ahead. They are very clued in to what is happening in our world and it won’t be a surprise is there is a surge in scam text messages claiming to be from delivery companies looking for personal details or payments. Treat every such message – even if you are expecting a delivery – with suspicion and don’t follow any links embedded in such messages.
[ Watchdog warns of new scam messages targeting shoppers on non-EU websitesOpens in new window ]
