You may be liable for duties and taxes when you trade with countries outside the European Union (EU). The terms of sale you agree will determine where liability for these costs will fall.

To determine what these liabilities are, Harmonised System (HS) codes are used to identify goods. Determine the correct code for your product by entering a word that describers it into the EU TARIC then follow the link until you find a code with a definition that fits your goods.  For a legally binding decision on the appropriate code for a product, as applied in Ireland, consult the Revenue Commissioners on Binding Tariff Information (BTI). Enter the first four digits of this code into the Applied Tariffs portion of the Market Access Database.  The tariff payable when the goods enter the country will be listed next to the code. Extra information may also be available.

The EU operates a number of preferential trade agreements that allow qualifying goods to claim lower or nil duty rates eg. Euro-Meditereannean Partnership.  See details of agreements on the Revenue Commissioner's website.

Goods exported from Ireland are zero rated for Irish Value Added Tax (VAT). Note though that, if you use an export service, your VAT position may be affected because it is dependent upon the place of supply. Your local office of the Revenue Commissioners will advise you on how the rules apply in specific circumstances.

VAT applies to trade within the EU. If the seller and the buyer are both VAT registered in their respective countries, and both VAT numbers are quoted on documentation, the sale is zero rated for VAT by the seller. The buyer accounts for it in his next returns. If the seller is VAT registered and the buyer is not, then the seller must charge VAT on the sale. The seller must register for VAT in the buyers’ country if sales to non-registered VAT buyers reach the specified threshold figures.

Trading electronically, online or as an ebusiness is subject to specific taxation principles and rules, particularly for VAT. Three types of ebusiness activity are affected by VAT:

• Physical goods ordered over the internet from a business in Ireland are taxed at the rate applicable in the country of consumption if the buyer is VAT registered in another Member country. Otherwise Irish VAT is charged and the exporter must register for VAT as stated above.
• Online supply of digitised goods and services from business to business are taxed at the rate of the country of consumption.
• Online supply of digitised goods and services from business to consumers are taxed, as far as possible, in the same way as traditional economic activity.

Tax law is complex. It is strongly recommended that you take advice from experienced tax specialists on all aspects of the tax treatment of online activity.