Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie
Hi there,
There is an issue with role permissions that is being worked on at the moment.
If you are having trouble with access or permissions on regional forums please post here to get access: https://www.boards.ie/discussion/2058365403/you-do-not-have-permission-for-that#latest

Do you charge VAT on Post & Packaging?

  • 07-09-2010 1:33pm
    #1
    Slasher
    Registered Users, Registered Users 2 Posts: 400 ✭✭


    If a company is sending a product by post, and charging the Customer for P&P, does it charge VAT on the P&P, and, if so, at what rate?

    Thanks.


Comments

  • #2
    nompere
    Registered Users, Registered Users 2 Posts: 1,678 ✭✭✭nompere


    What a good question.

    There's no obvious guidance (that I can find) within the Revenue website.

    I think the answer lies in the "package" rule.

    The supply of post and packing is ancillary to the supply of the product itself, and so chargable at the same rate of tax as the product. So if you're charging VAT on the product at 21% then you charge 21% on the postage and packing as well.

    I note that when I buy books from Amazon (and they are registered for VAT in Ireland under the distance selling rules) they do not charge VAT on the postage and packing. On the other hand, when I buy CDs they do charge VAT on the postage and packing. Books, of course, are exempt from VAT.

    If I'm foolish enough to buy both books and CDs without making the size of the order eligible for free delivery then I wil be charged VAT on the CD and all the postage. (I've just tested this on Amazon.)

    There are circumstances where expenses might be the subject of a separate agreement. That used to be the case with sales of zero-rated goods where the old package rule could make them liable to a 21% charge. The new rule I note above means that doesn't matter so much any more.

    There also exceptions relating to areas where there is an agent-principal relationship, and the agent makes payments to third parties on behalf of the principal. Revenue have never seen this as extending to incidental expenditure incurred by the agent, such as postage.


  • #3
    TomMc
    Registered Users, Registered Users 2 Posts: 1,616 ✭✭✭TomMc


    AN POST do not charge VAT on their various postal services, only the most expensive courier option.

    So, if you sell a physical product you charge 21% VAT on it (most products fall into this amount, but you will know yourself). If you collect the exact amount from your client that An Post charge for postage, you do not collect any additional VAT on the postage element provided it is itemised on your invoice/records. If you want to charge a little extra for packaging, you would have to charge VAT on it. So best option is to show the exact postage amount separately on the invoice and not charge any VAT for this portion of the invoice only.

    e.g.

    Product cost = EUR82.64 + 21% VAT (EUR17.35) = EUR99.99
    Packaging cost = EUR4.13 + 21% VAT (EUR0.87) = EUR 5.00
    Postage - An Post Fee = EUR15.00 - No VAT = EUR15.00


Advertisement