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CLARE O’TOOLE: No end to the mind-numbing stupidity of EU Customs taxes

A cascade of upset, frustration and sadness poured through my Facebook notifications after reaching out to several online Irish communities to ask if they’d had any trouble with EU Customs taxes and regulations on gift parcels over the holidays.

My inbox filled with stories of disruption and distress surrounding treasured family traditions and connections. Something is wrong when a new mother is taxed 40 euros for the gift of baby clothes from her sister abroad. Something is amiss when grieving family members have to contend with a tax bill of 76 euros for a few household items of purely sentimental value from their deceased grandmother. Something is not right when family Christmas gifts can’t be exchanged freely. One mother told of deciding to pay a 200 euro EU Customs tax bill for 2 Christmas parcels because she couldn’t face having the gifts returned unopened to grandparents. Something is not right when a student studying abroad in Ireland is forking over 90 euros in EU Customs taxes on care packages from home over the holidays.

In addition to the frustration with punitive taxes, there were also many stories of packages that didn’t arrive at all. Lots of Christmas parcels were returned to sender at considerable expense, not to mention distress, due to incorrect Taric codes.  A single miscoded packet of M&M’s sent one family’s Christmas gifts back to their grandparents. One unstoppable American grandmother was so frustrated with Irish Customs that she decided in the midst of the Covid pandemic to buy a plane ticket to Dublin and hand deliver her Christmas gifts!

As many of us have learned to our dismay, it is now nearly impossible and impractical given new administrative difficulties and prohibitive taxes to send a gift to Ireland from outside the EU. The net result for nearly all of the individuals that responded has been to ask family members abroad to please stop sending gifts and parcels to Ireland.

Irish revenue declined to provide any data on how much tax revenue the EU collects from gift parcels entering Ireland. I don’t know if the revenue collected from the gift tax is worth the political damage to both Ireland and the EU, but I suspect it is not.

I understand that impact of this tax is not felt by everyone. Those of us affected may well be a relatively small group within Ireland. At this point the block on gift giving is unilateral. Irish families can still send gifts to friends and family in US, UK, Canada and Australia as the tax-free gift limits and Customs regulations in those countries are all generous enough to allow the free exchange of small gifts between private households.

Irish families sending gifts to the US are allotted a tax-free limit of 100 dollars per individual. In Canada the tax-free limit is 60 Canadian Dollars per item. The UK tax-free gift limit is 39 pounds per item, per individual. Importantly, none of the countries above include shipping costs in the value of the packages allowed. What is striking here is the EU’s regulatory and tax interference on what is widely considered internationally beyond government’s reach – the exchange of small gifts between private residences. Almost every jurisprudence recognises the right of tax-free giving within families to some extent. The EU has taxed this right away to virtual non-existence.

The manner in which this new tax on gift parcels was implemented is also cause for concern. There was no national debate, no conversation about the gift tax and its implications for Irish families. it slipped in under the radar amid a larger implementation of post-Brexit EU Customs reforms. In July 2021, Irish Finance Minister Paschal Donohoe signed into Irish Law new EU Customs taxes and regulations that, among other things, charge 23% tax plus fees on all gift parcels entering Ireland from outside the EU with a total package value exceeding 45 euros (which includes the value of the items sent plus postage and insurance costs). The tax is paid not only on the value of the item in the gift parcel but also on postage and insurance costs.  In October of 2021, An Post launched an information campaign about the implementation of new VAT charges and Taric codes for non-EU online shopping. In AN Post’s media centre posts do not mention the EU Customs gift tax.

As a concerned citizen, I have a simple enough proposal. Raise the EU’s tax-free gift limit for post between private residences. I propose that the political damage far outweighs the limited and likely decreasing EU Customs revenue income from gift-giving. Where to next.

The EU’s website suggests citizens seek redress first with their national leadership. Fair enough. I’ve spent a good deal of time over the past months, reaching out to An Post, Revenue, Irish Members of the European Parliament (MEPs) about the EU Customs gift tax. The responses faithfully reported the position of the EU and outlined the details of the gift tax. I now also know that Customs revenues comprise 11%  percent of the EU budget contributing 19bn euro in 2020, and that Irish Revenue retains 25% of Irish Customs revenues as a processing fee for their work on behalf of the EU.

The Irish MEPs contacted did not provide any rationale or defence of the EU Customs gift tax. I was offered lots of sympathy and information about the tax and advised that this issue was the under the purview of the European Commission and the European Council. I have written to, and suggest anyone else concerned write to, TD Paschal Donohoe and Irish EU Commissioner Mairead McGuinness to ask if they support an increase in the tax-free gift limit. If not, why not? If so, what can be done to accomplish this goal?  I have not received a response from either.

Within the EU, the avenue advertised for EU policy concerns for the public is the EU Citizen’s Initiative Petition. I could set up Committee of 7 members from 7 different EU states and apply for recognition (which the EU Commission is free to reject). If I were able to collect 1 million signatures of EU citizens within 12 months, the EU Citizen’s Initiative Petition would be eligible for consideration by the EU Commission. Needless to say, no one actually suggested I pursue my right to petition the EU.

This may not be your issue, but it should cause you some pause for thought. If you had told me a year ago that the EU would block my kids from receiving their Christmas presents, I would have thought it a mad notion. This experience has opened my eyes. There are definite benefits to EU membership, but the responsiveness to citizens’ concerns inherent in a democratic, representative government is not one of them.

Makes you wonder, what will the next EU regulation coming down the pike look like? Will it enter into the national conversation or slip in under the radar? Will you know what it is and how it will affect your family before it is enforced?  Will our elected politicians have any influence on how or whether it is implemented in Ireland? Will we, as citizens, have any effective way to challenge EU legislation.

I am not inherently anti-EU, but this experience has been quite a shock to the system and forced a lot of uncomfortable questions about the EU.

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