With Cyber Monday 28th November and the online trading business this Christmas season already beating all records, Revenue is advising shoppers to be wary. Some online deals in particular really are just too good to be true, and what looks like an attractive offer can ultimately be an expensive or even a dangerous, mistake. The important things to remember are:
- Online Shopping has Tax and Duty Implications
Whether your purchases originate outside the EU or in another EU Member State, online shopping can have tax and duty implications, and you may be liable for tax and duty on your online purchases when your goods arrive. All goods from non-EU Member States are liable to tax and duty on arrival here. Last year, Revenue officers in postal depots nationwide applied charges to more than 70,0000 parcels, adding an average €33 in tax and duty per parcel.
Alcohol or tobacco products bought online or by mail order are liable to tax and duty on arrival in the State, whether they originate in another EU Member State, or outside the EU. A case of wine for sale online at €60 might look like a great deal. However, if the price is low, tax and duty have probably not been paid and Revenue may seize the wine on arrival. You are liable for the tax and duty. Excise duty and VAT on an average case of 12 bottles of wine originating in another EU country will add more than €60 bringing the price you actually pay to over €120.
- Counterfeit Goods are Illegal and can be Dangerous
The counterfeit trade operates in the shadow economy evading tax, translating into lost revenue for legitimate businesses and their employees, loss of jobs, and often funding organised criminal gangs. There are no health and safety standards in the counterfeit business, so these fake products are often unsafe, or even dangerous.
Revenue seizes counterfeit goods at import or export. This means that you will loose your goods and your money, and it’s very unlikely that a seller who trades in fake goods will refund your loss.
In short, that advice is to be careful – if a deal looks too good to be true, it probably is!
(1) Non-EU
If the value of your purchases from outside the EU is more than €22, you will have to pay VAT on the full item value (not just the value above €22). If the value of the goods is over €150, you may also have to pay Customs Duty, depending on the type of goods, and the country of origin. Customs Duty is charged on the full value of the goods plus the cost of postage, packing and insurance. Information on rates of duty can be obtained by accessing TARIC , which is an online EU Customs database. If someone sends you a gift from outside the EU, and its value is under €45, there is a relief from payment of Customs Duty, but only if the gift is of an occasional nature sent from one private individual to another. Be wary of websites that offer to undervalue your goods to avoid these import duties. This is illegal and as the importer, you are responsible for ensuring that that all duties and taxes are paid. Some websites may also promise delivery from within the EU, to eliminate any import charges, but are in fact shipping their products from outside the EU. Where this is the case, you are liable for all tax and duty. In general, there is no relief from Customs Duty, VAT, or Excise Duty for postal importation of tobacco, tobacco products, alcohol products, perfumes, or toilet waters, irrespective of their value. Gifts of excise products consigned from outside the EU are allowed relief as set out in Public Notice 1179. Shoppers should also note the restrictions on importing Medicinal Products. Under the Medicinal Products (Prescription and Control of Supply) Regulations 2003 to 2011,supply by mail order of prescription-only medicinal products is prohibited.
(2) EU – Alcohol and Tobacco Products
In general, goods bought from another EU Member State will not be liable for import charges. However, under EU Excise law, excisable products (alcohol or tobacco products) that have been subject to Excise Duty in an EU Member State, and are then shipped/posted to a private individual who lives in another Member State are subject to the payment of Excise Duty in the Member State of destination. These ‘distance sales’ which include online or mail order (e.g. from a newspaper advertisement) purchases, are also subject to VAT at 23%. This protects legitimate business importers or Irish based companies who sell wine online, and who pay all the tax and duty due.
When you buy alcohol (beer, wines and spirits) or tobacco products online from within the EU, Excise Duty and VAT must be paid here, regardless of the quantity. This also applies if the goods were a gift. Read the small print. You should always verify with the seller, and request documentary proof, that the price you pay includes duty and VAT in Ireland, and that payment has been made. If the tax and duty has not been paid and the alcohol is seized, you as the buyer are liable.
(3) Counterfeit Goods
The global trade in counterfeit products is huge, and some people may think it is harmless. What could be wrong with buying a fake ‘designer’ handbag, or aftershave or sports shoes at a fraction of the cost of the real thing? The problem is that shoppers who buy designer fakes and other counterfeit goods create a market for these goods, and while it might seem like you are getting a bargain, there are serious hidden costs and dangers.
Of course the problem is not just confined to fake designer items – there are fake medicines, food, baby formula, electronics, computer parts and software, car parts, toys, and jewellery to name but a few. There are no health and safety standards in the illegal counterfeit business, and these products are often unsafe, or even dangerous.
Revenue Role
Revenue action against counterfeit, fake or pirated goods is provided for by EU Regulations. Revenue is responsible for detecting such goods at import and export. We work closely with An Garda Síochána who have responsibility when pirated or counterfeit goods are found in the State.
Revenue regularly detains goods addressed to individuals who have purchased them online, in postal or courier hubs. Occasionally, larger consignments are detected in shipping containers, as a result of intelligence and profiling work by Revenue. The counterfeit goods we most commonly detain are sports shoes, clothes, handbags, cosmetics and watches. In 2015, Revenue interventions resulted in 2,713 detentions involving 138,182 counterfeit items. The estimated market value of the genuine equivalents of the detained items was €2.25 million. In addition, 9 joint enforcement operations with the Garda National Bureau of Criminal Investigation, targeting criminal gangs importing commercial volumes of counterfeit goods, resulted in high volume seizures with an estimated genuine equivalent value of €3.2m.
Where goods are suspected to be counterfeit Revenue detains them and contacts the brand holder. Revenue interacts with over 300 brand holders; if goods are confirmed to be counterfeit, they are seized.
(4) Counterfeit Alcohol
Vodka is the most counterfeited type of alcohol. It is produced illicitly and is bottled and packaged to resemble the genuine product. In many cases, the alcohol is sourced from the industrial alcohol sector and contains high quantities of methanol and isopropyl alcohol, commonly found in nail varnish remover. These are dangerous substances that can cause breathing difficulties, liver damage and blindness.
Anyone tempted to buy cheap alcohol, tobacco or consumer goods from a new or unknown supplier is reminded to be vigilant and aware of the possibility that they are buying counterfeit product, and taking on unknown additional health risks, as the products are not subject to quality control.
Confidential Free Phone Number
If businesses or members of the public have any information regarding the smuggling or sale of illicit alcohol, tobacco products, or counterfeit goods they can contact Revenue in confidence on free phone number 1800 295 295.