Last year I had to start paying ransom (VAT) when I receive gifts from friends and family abroad. Not only did I have to pay VAT on the declared contents, but on the postage as well!
Below is an email I sent to those in my Irish constituency related to financial matters. Of the 4 people I sent it to, including the Minister of Finance, only one responded (a local Councillor) and that was to tell me the directive came from the European Union (EU).
I then forwarded the email to the Irish contingent representing finance at the EU level and heard a deafening silence.
Therefore, I decided to post it on my blog in case other people are experiencing the same issue. If more people raise it with their EU representatives, there’s a chance to change the law to at least remove having to pay VAT on the postage of the package. Twice I’ve had packages sent to me from my sister in the US that contain $12-15 worth of items and the postage was over $45.00 (the fact that international postage is outrageously expensive, given most things are automated these days, is a whole separate topic). For me to pay 23% VAT on $60 ($15 worth of items + $45 postage) ends up costing almost as much as the items themselves! It’s no longer a gift at that point, it’s a burden.
Now some may think that the EU has more important things to do than retract a law that’s causing undo hardship on a small number of it’s constituents; however, I would argue that they had plenty of spare time to enact the law in the first place, so they can find the time to amend it.
I hope the members of the Oireachtas had a Happy Christmas. Mine would have been happier had I not, for the first time in the 11 years I’ve lived in Ireland, had to pay ransom to the Department of Revenue to receive the gifts my friends and family sent from abroad.
In 2021 the Oreachtas implemented legislation whereby gifts from non-EU countries would be subject to customs fees and VAT if “the value of the gift (including insurance, freight and postage costs) is €45 or less”.1 There is some jargon on subsequent pages of the website about declaration codes and “negligible value”. However, that is all legal speak that a friend or family member will struggle to interpret, and the post office in the remote location may also struggle to declare.
Has anyone in the Oireachtas tried to send a parcel it the last 2 years, domestically or abroad? At least half the time, the value of the postage meets or exceeds the cost of the items contained in the package.
Over the years since I moved to Ireland, I have been humbled by the generosity of my friends and family who will send me packages even though I gasp at the amount of postage they have had to pay. This year, my sister sent me a package containing $12 worth of contents and it cost $47 to send the 1kg box. A friend spent $65 to send $40 worth of gifts, just because they care about me and wanted me to have a gift along with a few of my favourite things. On the package from my friend I had to pay €28 in VAT (including the An Post fee) to claim this parcel of Christmas gifts.
Who came up with these values and why is postage, freight, and insurance included in the charges? There is no value to the recipient for postage, freight, and insurance, except possibly the love of the shipper, who paid such a price to send a little good cheer.
How is a family going to cope with such charges, particularly in this economic climate? Their friends and family abroad were just trying to be kind by sending something to brighten the holidays, but now the family may have to turn off the heating for a few hours each day for a week, or cut out part of their Christmas dinner in order to pay for the tax on gifts from abroad. Or worse yet, refuse the package, because they cannot pay.
Given this new legislation, which is being implemented with great force this year (I did not have to pay VAT on any Christmas packages last year), I’m going to have to tell my friends and family to stop sending me birthday and Christmas gifts. It’s just too expensive to receive them.
1 https://www.revenue.ie/en/customs/individuals/relief-gifts-low-value/rules-gifts.aspx
Finding your EU representatives: https://www.europarl.europa.eu/meps/en/home
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