No VAT on Amazon UK Orders Under €22

Many Amazon UK Orders Under €22 Are Now Cheaper For Irish Shoppers

This only applies to items SOLD by or Fulfilled By Amazon

We have written already about the Effect of Brexit on shopping on UK websites such as Amazon.

This article explains how Brexit has resulted in some price reductions when shopping online at UK websites.

Irish VAT Exemption on Imports

Since Jan 1st 2021 , any package delivered from the UK to Ireland that has a value less than €22 (including delivery charges) , is exempt from Irish import VAT. Brexit also means that UK Vat should not be charged on sales to Ireland .

This means that on packages under €22 – that are liable for UK VAT – Irish shoppers using Amazon UK should see a 16.66% price reduction

(Books are VAT free in both countries and will not change.)

Note – The rules are changing in July 2021 – and Revenue will not be exempting any orders from import VAT. So there will be VAT on Amazon UK Orders Under €22 from July. . More on this further down the page.

To take full advantage of this 6 month “discount” it would be a good time to sign up for Amazon Prime. You get 30 days free and can cancel at any time. Students can get 6 months free !

You can click here to get a free 30 Day Trial of Amazon Prime

VAT on Delivery Charges For Non-Prime Members

If you are not an Amazon Prime member in Ireland you will also pay Irish VAT on the Amazon delivery charge.
Even if your order is over £20 and qualifies for free delivery.

The Irish VAT has to be applied on the €6 delivery charge. Amazon then deducts the €6 at the end as a “promotion”. So – non-Prime members will see an extra £1.38 in “import fees” at checkout on all orders – which is the 23% Irish VAT on the £6 delivery. (It was 21% from Sept 2020 to Feb 2021.)

€22 Euro Cut off Point

As mentioned earlier – postal sales to Ireland under €22 are exempt from import VAT until July 2021.
Revenue’s rules mean that €22 Euro is treated as £19.95 GBP for all of January 2021 . (see the end of the page for the method of calculation.)
£19.95 excluding UK VAT, works out as £23.94 inclusive of UK VAT .
Amazon are probably not using the exact same exchange rate as Revenue.

We have found that it’s safer to use £23.00 as the cut-off figure.
Therefore , Irish customers with Amazon Prime should see a 16.66% final price reduction at checkout on single Amazon items priced under £23.00

Some Examples of Amazon UK Price Reductions After Brexit

We have checked the amounts of VAT on Amazon UK Orders Under €22 . We were able to order an Amazon Echo Dot for £16.66 for delivery to Ireland in early Jan.
This was 16.66% cheaper than the price of £19.99 for delivery in the UK . (Prime Member)

Ordering Multiple low Priced Items –

If you order 2 different items, each priced at £19.99 – and they show at Amazon checkout as coming in one delivery – then Irish VAT will be charged by Amazon on both items because the total “package” is over €22.

However, on the same order of 2 items costing £19.99 each, if on checkout the order is showing as needing 2 deliveries (maybe because of low stock availability on 1) – then Amazon will not charge Irish VAT on the whole order even though it is over the VAT threshold.
The VAT threshold is per “package” not per order. We have tested this out on Amazon UK – and that is how it worked (on 1st Jan).

VAT Changes From July 2021

These import VAT related price reductions will only last until July 2021.

This is because Ireland & EU is abolishing the import VAT exemption on low value parcels.
From July 1st 2021 Irish VAT will be charged on all orders from non EU countries delivered to Ireland. The retailers are supposed to charge the correct VAT at checkout from July – so we expect to see more confusion with lots of non EU sellers come July 2021.

For sellers on Amazon – the Irish VAT will be taken care of by Amazon on orders under €150. So we expect to see more small non EU retailers moving on to Amazon or similar marketplaces to save themselves the hassle and expense of registering for VAT in several EU countries.

(Or else they might have sorted out by then !)