miðvikudagur, maí 09, 2007

taxes and shipping extra

My sister-in-law sent me a book as a birthday gift from Amazon. When it arrived the mailman wanted me to pay VAT on it. I told him I didn't know what it was and I hadn't ordered anything. I told him it was probably a gift. Sure enough, it was marked "gift" on the customs form. He told me I must have ordered it. So I opened it in front of him and took out the invoice. It was marked clearly with a billing address in the States and there was even a "happy birthday!" note on the invoice as well.

He said, well, you still have to pay the VAT. I said, this is clearly a gift from her. He shrugged and said, well, if she had sent you the same brand-new book in a hand-addressed box, then no VAT. The fact that the box was professionally packed by Amazon made it eligible for taxes. I ended up paying about as much VAT as the book had cost her in the first place.

Now Iceland Report regular and freelance writer Ian Watson has published his own take on Iceland's schizophrenic personal-importation policy. He points out that changing the law in this regard would have profound effects on the high prices we pay for all goods in Iceland. It's well worth a read.

4 Comments:

Blogger Maja said...

That used to infuriate me when I was in Iceland. I used to order things to be sent to my brother in Australia and then get him to send it to me from there.

12.5.07  
Blogger Poppet said...

Wow, that must be annoying. I'm a newish reader, so I thought it was about time that I posted a comment:)

Sorry to see that Iceland didn't make it to the finals of the Eurovision Song Contest last night. Nice to see they still voted for their Scandinavian brothers though (ie Finland and Sweden). I was wondering what the Icelandic people actually think of it, as here in England we do kind of see it as one big joke?

Keep up the blogging! I really enjoy reading about your time in Iceland - especially as I'm an anthropology student:)

Sara x

13.5.07  
Blogger KEITH HAYWARD said...

I remember when I was first here in 2000 though, everyone was sending their amazon "gifts" to their neighbours and avoiding paying tax.

If you're ordering from abroad the VAT will get knocked off the original price so it was bascially a tax dodge. I guess it's not that surprising they changed the law but it's annoying when it's a genuine gift...

13.5.07  
Blogger JB said...

Keith, I am not sure the VAT gets knocked off, at least according to Ian's article.

Anyway it's crazy that VAT applies in some cases and not in others. Everyone should have a per-kennitala revolving exemption on postal orders. Say 5000 ISK worth of merchandise importable tax-free every month. That would do it.

14.5.07  

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