# amount of VAT charged on online purchases



## panathon (27 Jul 2011)

I buy online from the UK based Oasis clothes shop. I understand the requirement to charge VAT at the irish rate which is added to each purchase just before checking out (21%). However on their website they state "All prices shown on the website are inclusive of VAT at the current UK rates."

My question is should they not be deducting the VAT at the UK rate from the items before then adding VAT at the irish rate. Or are they entitled to charge VAT twice, or do they have to charge it twice?


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## Leo (27 Jul 2011)

Are you saying they add a further 21% to the prices on display? If so, then no, they should not be doing this. The Irish rate only should apply.
Leo


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## JoeB (27 Jul 2011)

Are you certain Leo?

I thought UK shops charged UK VAT. If they have to charge each countries VAT then the cost of compliance would be huge.. they'd have to keep track of 20 or so VAT rates, and they'd have to have a system to apply them all correctly. Different goods may be rated differently in different countries, and the systems may not be entirely compatabile.

I thought retailers charged their own countries VAT. That's certainly what UK retailers do in my experience, they charge UK VAT.


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## newirishman (27 Jul 2011)

JoeBallantin said:


> Are you certain Leo?
> 
> I thought UK shops charged UK VAT. If they have to charge each countries VAT then the cost of compliance would be huge.. they'd have to keep track of 20 or so VAT rates, and they'd have to have a system to apply them all correctly. Different goods may be rated differently in different countries, and the systems may not be entirely compatabile.
> 
> I thought retailers charged their own countries VAT. That's certainly what UK retailers do in my experience, they charge UK VAT.



The e-commerce laws state that if an EU-based company sells via internet (or any mail order company actually) within the EU, the VAT is to be paid in the buyer's country - but only if those sells exceed certian thresholds: VAT of the Member State of destination is applied if sales in that  Member State exceed certain thresholds (EUR 100 000 or 35 000 or the  equivalent in national currency)
see [broken link removed]
and further links on that page.

In the example above, if you buy from a UK company, you are charged only Irish VAT not the UK VAT (you must not pay VAT twice). So, you see the price including UK VAT, but you are invoiced  "price" - "UK VAT" + "Irish VAT".


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## BillK (27 Jul 2011)

When I buy online from Ireland the price includes VAT at the Irish rate.


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## Leo (28 Jul 2011)

JoeBallantin said:


> Are you certain Leo?


 
Yep, Newirishman has summed it up nicely. If the company doesn't exceed the threshold, they charge VAT at the local rate, if they do, they must charge VAT at the destination rate. One rate or the other, but not both.
Leo


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