Often More Expensive Than the Product Itself

The new parcel tax is already causing some bizarre reactions

For some low-cost products, the new parcel tax accounts for a large portion of the final price.(Bild: Krone-Collage/APA/ZOE-SOPHIE ZIMMERMANN, Screenshot: amazon.com, Krone KREATIV)

As of today, the new parcel tax is in effect in Austria—and it’s already causing quite a stir on social media. Users are particularly upset by the fact that large mail-order companies are—as expected—passing the new tax directly on to their customers. The tax is having particularly curious effects at Amazon, the largest online retailer: for some products, the new tax is more than twice the actual value of the goods.

For example, if you order a single tube of lip balm on Amazon Prime for 91 cents (including VAT), you’ll suddenly end up paying 3.31 euros. This is because, in addition to the product price, 2.40 euros in package tax is charged. As a result, the tax, including sales tax, amounts to more than two and a half times the actual value of the item.

One euro suddenly becomes 3.42 euros
The combination with Amazon Prime makes this particularly curious. With the company’s own free shipping offer, customers can still order individual, very inexpensive items and have them delivered to their homes. The noticeable cost increase isn’t due to shipping—but to the new government levy.

For particularly inexpensive products, the parcel tax thus becomes the dominant item on the bill. A single 75-gram package of Mannerschnitten, for example, costs 1.02 euros. Added to that is 2.40 euros in parcel tax, including sales tax. This brings the total to 3.42 euros.

Whether shipping a single package of Mannerschnitten makes business sense is another matter entirely; however, especially for such inexpensive items, the fixed tax naturally carries significant weight.(Bild: Screenshot: amazon.com, Krone KREATIV)

The effect is similar with a USB 2.0 cable costing 1.10 euros. With the parcel tax, the order costs 3.50 euros. The tax alone thus accounts for nearly three-quarters of the final price.

Even for a single VARTA button cell costing 1.46 euros, the flat-rate fee carries significant weight—the total price rises to 3.86 euros, with the tax accounting for 68.48 percent. For a tube of UHU craft glue costing 3.28 euros, the total price, including the package tax, is 5.68 euros.

In some cases, more than two-thirds is tax
If you factor in not only the parcel tax but also the sales tax on the respective product and the sales tax included in the parcel tax, the ratio becomes even more striking.

For the Sebamed lip balm, which costs 91 cents, the total tax portion thus amounts to about 77 percent of the final price. For the Mannerschnitten, it’s about 75 percent; for the USB cable, just under 74 percent; and for the Odol med3 toothpaste, about 71 percent.

This leads to a situation that seems absurd at first glance: For a single, very inexpensive order, the government tax can significantly exceed the actual value of the goods. Anyone who needs a small replacement part, a button cell battery, or a hygiene product ends up paying a substantial portion of the bill not for the product itself.

Flat-Rate Levy Hits Low-Cost Items Especially Hard
The reason for this lies in the structure of the new tax. Mail-order companies with more than 100 million euros in revenue in Austria must pay two euros per package or order. Including value-added tax, this amounts to 2.40 euros for customers.

Retailers can decide whether to charge the fee per package or per order. Amazon, Otto Austria, and Zalando have opted for the per-order option. This means the package tax is charged only once—regardless of how many items are ordered or how many packages the delivery ultimately consists of.

For larger orders, the fixed amount is proportionately reduced. For example, with a shopping cart total of 100 euros, 2.40 euros naturally represents a much smaller proportion than it does for a product costing 91 cents.

Free shipping makes the effect even more bizarre
Amazon Prime, of all things, reinforces this curious impression. Customers pay no additional shipping fee for eligible Prime items. Even single, inexpensive products can be ordered and delivered to their homes this way. So with such an order, there isn’t a high shipping cost next to a low item value. Instead, shipping remains free for Prime customers, while the new package tax becomes the largest additional cost.

Major retailers are passing costs on to customers
This is precisely what has been causing frustration since the tax went into effect. On social media, there has been particular criticism that major online retailers are not absorbing the additional burden themselves but are passing it on to customers. Amazon had already informed its customers before the tax took effect and now displays it as an additional line item under every single product. At checkout, the tax is then listed as a separate line item.

According to the Retail Association, a total of 16 major online retailers and online marketplaces are affected, including Amazon, Temu, Zalando, Shop-Apotheke, eBay, Otto, Best Secret, AliExpress, MediaMarkt, Apple, Universal, IKEA, Shein, XXXLutz, and Refurbed. According to the Retail Association, approximately 4,000 Austrian businesses that sell to consumers via major online marketplaces are also affected.

Retailers Anticipate Consequences
The retailers themselves are critical of the new tax. Amazon has already expressed legal concerns. A spokesperson stated that the company has doubts about the constitutionality of the law as well as its compatibility with the rules of the EU single market. Amazon is therefore seeking legal clarification.

Otto Austria also announced legal action. Managing Director Harald Gutschi expects up to ten retailers to take legal action against the parcel tax. The Austrian Retail Association is also considering filing a complaint with the European Commission in collaboration with the European umbrella organization Ecommerce Europe.

Measure Aimed at Financing Lower VAT
The Ministry of Finance expects the new tax to generate revenue of around 280 million euros per year. The money is intended to help offset some of the costs of the VAT reduction on selected staple foods.