VAT & Dropshipping in Ireland

It is legally possible to structure dropshipping in such a way that the seller is not required to charge Irish VAT in specific cross-border scenarios. Below you will find the legal basis and the practical implications for Irish e-commerce businesses.

Many online retailers ask: “Do I need to apply Irish VAT if the products are shipped directly from a supplier outside the EU to a customer in Ireland?” The answer is found both in the EU VAT Directive and in Irish VAT legislation.

EU legal basis

Within the European Union, the place of supply determines where VAT is due. When goods are shipped directly from a third country (for example, China) to a customer in Ireland and the transport begins outside the EU, the place of supply is not in Ireland.

Article 32 of Directive 2006/112/EC (VAT Directive):
“When goods are dispatched or transported by or on behalf of the supplier, the place of supply shall be deemed to be the place where the goods are located when the dispatch or transport to the customer begins.”

Irish legislation

Irish legislation reflects the same principle in the Value-Added Tax Consolidation Act 2010.

Section 30, VAT Consolidation Act 2010:
“A supply of goods dispatched or transported by or on behalf of the supplier to the customer shall be deemed to be made in the place where the dispatch or transport of the goods to the customer begins.”

Interpretation: if the transport begins in a third country, the supply is not considered to take place in Ireland → no Irish VAT liability arises for the seller.

Practical application for dropshippers

For Irish businesses, this means that sales with direct shipment from third countries can be structured without Irish VAT. The use of the IOSS scheme may simplify administrative handling but does not change the fundamental place of supply rule. Errors in invoicing, e-commerce system settings, or documentation can lead to reassessments by the Revenue Commissioners.

Our expertise

The rule may seem simple, but its correct application requires a deep understanding of Revenue Commissioners’ practice, customs procedures, and e-commerce systems. Our international team of VAT and e-commerce experts helps dropshippers to build legally secure structures and ensure full compliance.

Conclusion

Dropshipping can be organised in Ireland so that no VAT is due from the seller, provided that the place of supply conditions are correctly applied and documented. Professional guidance is strongly recommended to avoid fiscal and legal risks.

Contact

Do you want to ensure your dropshipping structure for the Irish market is fully compliant? Contact Ecom VAT Experts for specialised advice.