Online shopping: What you need to know

As we enter the festive season, many of us will be looking online to buy gifts for family and friends. However, don’t let unexpected extra costs on your online purchases dampen your holiday spirit. In this article, we introduce some of the additional costs and consumer rights that may affect you, depending on where your online purchases are dispatched from. 

Ordering goods online that are dispatched from another EU country

The European Single Market, also known as the European Common Market, ensures free movement of goods, services, capital, and persons within the EU. As a result, goods can move around the EU almost as freely as they can move around within a single country. 

When you purchase goods online that are dispatched from another EU country:

• There are no customs duties to be paid, and 
• The Value Added Tax (VAT) is already included in the final price that you pay at the online checkout. 

However, you may have to pay excise duty on certain goods, such as tobacco and alcohol.

Ordering goods online that are dispatched from a non-EU country

When you order goods originating from outside the EU:

• You will have to pay customs duties on goods above €150. The customs value is based on the price that you paid for the goods. 
• The VAT may be included in the final price that you pay at the online checkout. For example, many larger online retailers have signed up to the EU Import One Stop Shop, which means that VAT will be included in the price at the checkout. However, in other cases, where VAT is not included in the checkout price, the postal operator or courier may collect VAT from you upon delivery. The taxable amount on which VAT is charged includes the customs value, taxes, duties, levies, and other charges, such as shipping and insurance costs. 

You may also have to pay excise duties on certain goods, regardless of the price of the goods.

Consumer rights in the EU

In addition to the advantages provided by the European Single Market, EU consumer protection rules ensure certain rights for buyers when they shop online. The EU website provides an easy-to-use interactive tool and a factsheet to help you understand your rights when buying in the EU. 

Business location

Before purchasing online, you should check if the business is located in the EU. A website name may indicate that it is an EU-based business, for example, websites that end in a domain extension associated with an EU country (.es, .de, .it). However, this does not guarantee that the business is based in the EU. 

You can check the terms and conditions, privacy policy or ‘contact us’ part of the website to find the physical address of the business. If you know the VAT number for the business as noted on the website, you can validate it online via the VIES VAT number validation webpage.

Further Information

Please check the EU website for a full overview of the EU countries and certain territories where EU rules regulating customs, VAT and excise apply.

To find out more about taxation in the EU, including customs and VAT, explore the broad range of educational materials on the TAXEDU website.