eBay charging VAT on cross border transactions within the island of Ireland

[declan64]

I completed an eBay sale to a modeler in the North on Friday night and noted on the Paypal invoice that eBay had charged a 20% "Sales Tax" on the item.

Now am I imagining things or are eBay out of line here?

I have emailed both eBay and the Revenue Commissioners on the matter for clarification but if eBay are entitled to do this it makes a mockery of any Good Friday agreement and any Northern Ireland Protocol and my next emails will be to some politicians.

Any one else with similar experiences?

Brexit has been a nightmare for modelers. This is close to the last straw for me.

[WRENNEIRE]

Might be something of interest here but to be honest I couldn't be arsed to read it

https://www.ebay.ie/pages/help/policies/seller-tax.html

[jhb171achill]

2 hours ago, declan64 said:

I completed an eBay sale to a modeler in the North on Friday night and noted on the Paypal invoice that eBay had charged a 20% "Sales Tax" on the item.

Now am I imagining things or are eBay out of line here?

I have emailed both eBay and the Revenue Commissioners on the matter for clarification but if eBay are entitled to do this it makes a mockery of any Good Friday agreement and any Northern Ireland Protocol and my next emails will be to some politicians.

Any one else with similar experiences?

Brexit has been a nightmare for modelers. This is close to the last straw for me.

TWENTY percent?

I very much suspect that is blatant profiteering by some parasitic Bezos type in the USA.

I have already vowed to boycott anything "amazon" on principle, even if it means I have to walk to Patagonia to collect a spare coupling for a Z gauge cattle wagon. Ebay are on notice now.........

Trade between north and south cannot, should not and must not be infringed or interrupted.

[murphaph]

That sounds wrong what eBay have done. After so much publicity surrounding the protocol, you'd think eBay would be aware of NI's special status.

https://www.revenue.ie/en/customs-traders-and-agents/brexit/information-for-businesses-trading-with-ni/vat-trade-with-ni-after-transition/index.aspx#:~:text=Northern Ireland continues to be,not apply to Northern Ireland.

 

 

[Galteemore]

It’s 1932 all over again….but we can’t blame DeV this time! 
 

 

 

[Edo]

lol - you would know we're a load of old fogies - most folks under 40 have never heard of DeValera - let alone the Anglo - Irish economic war of the 1930's

Yeh - thanks to BJ making irreconcilable promises and legal agreements to all parties- Norn Iron is in a serious state of flux now. I don't know what the answer is - part of me would like to see the English Government fulfill its technical commitments  to the Protocol - which hasn't happened - that would smooth down a lot of the logistics issues that have arisen....but I don't think the political will is there to make this agreement work from the English side -its short term more advantageous politically in the UK to keep pointing the finger at the EU for doing what they signed up to do...........and that is just stirring the pot up North - I just pray we can get thru the summer without anything kicking off ....sinister elements are gagging for the return of old  times.........please god we don't go there.

All logistics companies are covering their asses big time because of all the uncertainty -both covid and brexit related - I have a great deal of sympathy for the thousands of small businesses that have been happiiy trading away for decades in these islands and have now  been brutally left in the worst of all worlds thanks to those lunatics "taking back control" in London.......it  didn't have to be like this at all and I fear we haven't seen the half of it yet.

[murrayec]

@declan64

By the special agreement the North is kind of still in the EU, so VAT is charged when selling & buying across the Irish/North border;-

https://www.revenue.ie/en/customs-traders-and-agents/brexit/information-for-businesses-trading-with-ni/vat-trade-with-ni-after-transition/index.aspx

It's down to ebay to ensure VAT is charged if the seller is not registered for VAT, it's also down to ebay to return the VAT charges to Irish Revenue or do VAT offset in their returns......

Eoin

[declan64]

Here's the rub, the VAT charged on this transaction was UK VAT not Irish VAT - there was a GB VAT reference added to the buyers address in Paypal. 

If eBay are going to collect VAT on every single transaction for sellers who are not VAT registered then so be it. I'll just stop using it altogether.

I recently (April) sold some stuff to a number of buyers in Europe (EU countries) and no VAT was applied so if any of these buyers had been in the North it looks like eBay would have hit them with VAT. This is the inconsistency I have a problem with.

I await responses from my queries to both eBay and Revenue on this....

[declan64]

Just got a response from revenue.

This was my question to them:

I wanted to confirm that my understanding is correct. This transaction is between two private individuals - the seller in the south, the buyer in the North and my understanding that there should be no VAT due on this transaction and moreover the shipping of the item does not require any customs declaration as it would do if the buyer was in mainland UK. Am I correct?

Revenue response:

"You are correct in your understanding.

This sees to be a private sale between two private individuals and  is a matter between you  and ebay.

Revenue cannot interfere in this private transaction."

So there you have it. Now let's see what eBay come back with.

[murphaph]

That's exactly what I would have thought if two private sellers sell something in the EU Vat area, be it cross border or otherwise. There's no vat because the seller is not vat registered and is not obliged to be. 

If eBay is going to apply vat on all private sales then I think they will lose an awful lot of users.

[declan64]

BREAKING NEWS

eBay support have responded  to me that they believe my assertion is correct and are escalating the issue to their technical team. They will get back to me once they have a further update.

Let's see where this goes now.

[murphaph]

Excellent Declan. Fair play to you.

[connollystn]

Remember the good old days when you could walk into your local model railway shop and couldn't find what you were looking for? That's the reason many of us resorted to purchasing on-line and, it certainly has it's pitfalls. Has it's advantages also.

[declan64]

Online purchases have probably killed off most of the model shops. Post Brexit I think there is a renewed opportunity for model shops, particularly for UK models from the likes of Hornby, Bachmann and Dapol as well as the Irish stuff and the raft of scenery and supporting items. IRM are hosing up a lot of the Irish online purchases of course and will surely grow their Accurascale sales over time for UK models. When you consider the hassle of dealing with returns to the UK now being able to walk down to your local model shop is a far more appealing option. The relationships between the likes of Hattons and Rails with vendors such as Hornby appear to be fractured so these vendors are no longer the one stop shop they were in the past.

I recently paid 18 euro to a courier for "handling" the VAT associated with a UK order. That was on top of 20 euro for the courier in the first place.  If I could get what I wanted locally, even at a modest premium I'd gladly do it.

Also there is no online equivalent to the actual experience of visiting your local model shop of course. God be with the days.

[jhb171achill]

10 hours ago, connollystn said:

Remember the good old days when you could walk into your local model railway shop and couldn't find what you were looking for? 

Best evidence so far that U2 are railway enthusiasts!

[Galteemore]

Thanks JB -the clues were there if we’d only looked. They even admit to struggling with kit building and needing help: Sometimes You Can't Make It on Your Own

[Bumble_Bee]

that sounds ridiculous!! I can understand tax for things like businesses but surely a person to person transaction on the likes of ebay should be exempt from VAT, especially if its a personal account rather than a business/shop account. 

[BosKonay]

It’s basically down to new rules. 
 

https://sellercentre.ebay.ie/seller-update/2021-march/eu-vat-changes

[WRENNEIRE]

So do you think we will see an IRMBay soon?
Askin for a friend

[Mayner]

Its something people will have to learn to live with as the  "e-bay" tax is driven by pressure from Governments internationally to plug "tax leakage" through international and domestic on-line sales.

On line platforms like e-bay make it a lot more cost effective to collect vat and duty at the point of sale than Customs intercepting a package at the Border. The logical extension is for Governments to levy a sales tax on all financial or barter transactions between individuals within the state, cashless transactions make this a lot easier.

In the good "old days" around 1975 while living in Dublin I had to pay duty and tax on a order of Irish railway books from the IRRS London Area. More recently I have had to pay duty and sales tax on second hand large scale locos and rolling stock bought from private individuals in the UK and United States.  Buying locally was not an option and would have been a lot more expensive than paying the tax and duty(Electric trains are liable for duty in my part of the World)

[jhb171achill]

I have a bona fide address on a neighbouring island as well as here. I get stuff delivered to Neighbouring Island (no, it's not Achill - it's a bit bigger) OR to here, depending on which shower of tax-gougers I perceive i will have to pay less to.

If the GNR drivers could smuggle butter, poitín and stockings in the 1940s, who am I to break an old railway tradition.

[murphaph]

10 hours ago, BosKonay said:

It’s basically down to new rules. 
 

https://sellercentre.ebay.ie/seller-update/2021-march/eu-vat-changes

I'm not seeing where eBay should be adding VAT on for a sale between two private parties across the Irish border. In the table they provide the last row states that they will not be collecting VAT for sales inside the EU and this is the crux of the matter: NI is not in the EU but it is in the EU's VAT area so the intra-EU rules should apply:

Inside EU*, Any value, Inside EU*, No

Also note these changes only take effect from the 1st of July according to that page. I suspect eBay are actually (incorrectly) applying UK law in this case as the UK went ahead with all these online VAT changes in January already (the changes were agreed at EU level while the UK was still a member state and the UK went ahead and implemented them as originally planned whereas the EU decided to delay their implementation due to the Covid and Brexit problems for 6 months).

I still think eBay is wrong here because NI is in the EU's VAT area and should be treated as such by both the EU and UK. That's the whole point of the protocol, to maintain the all island economy as laid out in the Good Friday Agreement. As we all know with places like the Canaries, being inside the EU itself doesn't mean being inside the EU's VAT area and vice versa. The eBay page is a bit wishy washy there. They should be using the term "EU VAT area", rather than "EU" I think. The Canaries are in the EU but outside the EU VAT area. NI is outside the EU but inside the EU VAT area. There are a handful of other examples of being inside the EU but outside its VAT and customs area, for example https://en.wikipedia.org/wiki/Büsingen_am_Hochrhein 

[BosKonay]

8 hours ago, WRENNEIRE said:

So do you think we will see an IRMBay soon?
Askin for a friend

https://irishrailwaymodeller.com/classifieds/

 

I haven't had a lot of time to spend tweaking it, but it's completely free to list

[StevieB]

I was always under the impression that VAT was not applicable to secondhand goods, the process of adding value through the life of a product finishing at the point of sale. Is this simply a case of raising revenue the easy way, catching the large, multinationals proving too difficult. Import duty is entirely a different matter.
 

Stephen

[murphaph]

I think VAT is a misnomer here. If I import something to Germany from outside the EU VAT area and it gets stopped, I pay Einfuhrumsatzsteuer (import sales tax) rather than Mehrwertsteuer (literally value added tax). The rates between the two are identical but they are legally two different taxes and the import sales tax applies to used goods too. As these things are harmonised across the EU, I suspect the import tax in Ireland is also not strictly speaking a value added tax, but exactly that, an import tax which mirrors the rate of VAT. Basically the new rules are to clamp down on your Chinese eBay seller sending small stuff VAT free and there being a fair chance of it slipping through the cracks in the overburdened system and no tax whatsoever being paid on it.

[Mayner]

The New Zealand GST (goods and sales tax) is a more accurate description  of  VAT as a sales and purchase tax.

The recent international changes in how VAT/GST is collected is partially as a result of political pressure from retailers and locally based traders about business lost because of people importing small and large stuff from overseas without paying duty or GST. 

The former owner of the local equivalent of Mark's Models was literally fit to be tied because local railway modellers were increasingly buying their locos and stock from the United States and the UK.

The move to international on-line platforms and electronic payments makes it easier & cost effective for governments to levy VAT/GST/Import sales tax on small purchases, than Customs Checks at the point of import.

Basically before governments forced businesses like E-bay to collect VAT/GST on imports it was costing Customs services more to collect VAT on small purchases (<$100NZ) than it was earning in revenue despite various levies and charges.

 

 

[Andy Cundick]

Just a thought,what value do you add to something by taxing it? Andy.

[NIR]

7 minutes ago, Andy Cundick said:

Just a thought,what value do you add to something by taxing it? Andy.

Exactly, the whole basis of VAT is that it stops once it reaches the consumer. That's why there are the VAT margin schemes on second hand goods, goods that have been sold by a consumer to a business.

VAT is just a massive list of exceptions anyway, no one really knows it all, not even VATmen.

Edited June 16, 2021 by NIR

[jhb171achill]

On 16/6/2021 at 1:43 PM, NIR said:

Exactly, the whole basis of VAT is that it stops once it reaches the consumer. That's why there are the VAT margin schemes on second hand goods, goods that have been sold by a consumer to a business.

VAT is just a massive list of exceptions anyway, no one really knows it all, not even VATmen.

Thirty years ago, while RPSI treasurer, I had a massive argument with the vat people in the north, who wanted some £30k for something backdated. Eventually, I went through their own rules and legal piffle and proved to them by quoting their own rules back to them, that they were wrong. They dropped their claim, but not before I made serious personal complaints to the highest levels about two specific individual staff, who were like mini-Hitlers on speed.

[murphaph]

I had the German customs incorrectly levy VAT on a small item marked as a gift (from a kind forum member here). It was a 10GBP gift. It was well under the €45 gift threshold. I appealed and went through the (long) formal process and got my €2.22 refunded to me. It did it out of principle. The system is ridiculous. They should be able to treat stuff from say China suspiciously as they often use false declarations commercially. Let them inspect all Chinese parcels then. The crack a nut with a sledgehammer method is nonsense.

[StevieB]

The trouble these days is that it is much easier for the Revenue to catch the little men rather than the big ones. One has only to look at the mega corporations, which shift money about legally, but unethically, to reduce their tax burden.

Stephen

[airfixfan]

Only yesterday our railway group had 2 items posted in NI to Germany and Spain returned due to.unpaid EU duties. Have took them.back to the Post Office this morning which apologised and tells us that outside Ireland people are completely ignorant of the NI Protocol. Have sent more new books out yesterday so shall see what happens!

[skinner75]

15 minutes ago, airfixfan said:

Only yesterday our railway group had 2 items posted in NI to Germany and Spain returned due to.unpaid EU duties. Have took them.back to the Post Office this morning which apologised and tells us that outside Ireland people are completely ignorant of the NI Protocol. Have sent more new books out yesterday so shall see what happens!

Doesn't the NI Protocol give businesses in NI access to the Single Market, as well as the UK market? Best-of-both-worlds so to speak?

So no duties should have been leveled on the items in the first place - or am I getting that wrong?

Edited November 18, 2021 by skinner75

[airfixfan]

That is the point indeed as NI under the protocol is still inside the EU. So no.additional fees should be changed sending stuff to the EU

[jhb171achill]

7 hours ago, skinner75 said:

Doesn't the NI Protocol give businesses in NI access to the Single Market, as well as the UK market? Best-of-both-worlds so to speak?

So no duties should have been leveled on the items in the first place - or am I getting that wrong?

YOU are getting it right, Skinner, indeed; a pity that many sellers or importers beyond our shores can't be bothered to read the guidelines!