Government expected to move on 'Netflix tax'

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118 posts

Master Geek

#1622207 4-Sep-2016 07:04

Yabanize:

I disagree with paying GST on Netflix because I see it as an overseas purchase...

You're in NZ, buying a service with NZ currency, from a company that offers a NZ-specific set of products that are delivered from servers within NZ (see "Researchers map Netflix's content delivery network for the first time" http://www.qmul.ac.uk/media/news/items/se/180078.html). I think it is difficult to argue that you're buying from overseas.

Behodar

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#1622212 4-Sep-2016 07:45

Yabanize: But are you buying the DVD from an NZ comapany, or Amazon or eBay for example

DVDs from overseas still attract GST, it just isn't collected for administrative reasons unless it totals at least $60.

tdgeek

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#1622213 4-Sep-2016 07:47

Ouranos:

Yabanize:

I disagree with paying GST on Netflix because I see it as an overseas purchase...

You're in NZ, buying a service with NZ currency, from a company that offers a NZ-specific set of products that are delivered from servers within NZ (see "Researchers map Netflix's content delivery network for the first time" http://www.qmul.ac.uk/media/news/items/se/180078.html). I think it is difficult to argue that you're buying from overseas.

Agree. If I buy almost anything at Bunnings, its an item that is manufactured overseas, I am purchasing from overseas, albeit made much easier by Bunnings bringing it here and taking care of the paperwork for me.

Yabanize

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#1622214 4-Sep-2016 07:54

Behodar:

Yabanize: But are you buying the DVD from an NZ comapany, or Amazon or eBay for example

DVDs from overseas still attract GST, it just isn't collected for administrative reasons unless it totals at least $60.

Exactly, so Netflix, being $12.99 shouldn't attract it

tdgeek

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#1622217 4-Sep-2016 08:01

Yabanize:

Behodar:

Yabanize: But are you buying the DVD from an NZ comapany, or Amazon or eBay for example

DVDs from overseas still attract GST, it just isn't collected for administrative reasons unless it totals at least $60.

Exactly, so Netflix, being $12.99 shouldn't attract it

I think he meant you buying a DVD privately, from an overseas site, it should have GST attached but due to admin costs they set a limit of $60

old3eyes

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#1622224 4-Sep-2016 08:29

I guess there are quite a lot op people here who just love to pay more tax that they do already..

Regards,

Old3eyes

shk292

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#1622226 4-Sep-2016 08:40

old3eyes:

I guess there are quite a lot op people here who just love to pay more tax that they do already..

But, the tax revenue to run the country has to come from somewhere - so getting it as GST on what is a purely discretionary "luxury" purchase such as Netflix seems quite fair. Better that than raising PAYE or an overall increase in GST

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rmt38

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#1622233 4-Sep-2016 08:52

shk292:

old3eyes:

I guess there are quite a lot op people here who just love to pay more tax that they do already..

But, the tax revenue to run the country has to come from somewhere - so getting it as GST on what is a purely discretionary "luxury" purchase such as Netflix seems quite fair. Better that than raising PAYE or an overall increase in GST

Perhaps discussions of the worthiness of GST should be considered off topic.

Behodar

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#1622238 4-Sep-2016 09:01

Yabanize:

Behodar:DVDs from overseas still attract GST, it just isn't collected for administrative reasons unless it totals at least $60.

Exactly, so Netflix, being $12.99 shouldn't attract it

Again, DVDs from overseas do attract GST. The value is irrelevant.

For admin reasons (the hassle of sending a physical bill to the customer, having storage space to hold the package until GST is paid, etc) the GST is not collected on physical packages until it is economic to do so (set at $60). Those overheads do not exist with downloaded products and it is considered economic to collect GST for downloaded purchases below $60.

shk292

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#1622262 4-Sep-2016 09:51

rmt38:
Perhaps discussions of the worthiness of GST should be considered off topic.

Off topic in a thread about GST? Hmm OK

wsnz

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#1622309 4-Sep-2016 10:41

tdgeek:

Not at all, as you know. A DVD attracts GST. Why not the soft version? Say a DVD costs $19. Whats the cost of the hardware? Cents. The value is the content.

A DVD that costs $19 doesn't have a GST content of 4c as in disk plus GST

The reason why most imported services haven't traditionally attracted GST, is because when GST was introduced in 1986 (almost exactly one year after the flux capacitor was first tested in a production environment) the low volume of imported services meant that compliance & administrative costs would have exceed revenue generated. The Labour government of the time made a conscious decision not to pursue enforcement of taxation on such services.

Contrasted with the situation today, Governments world-wide are missing out on what they see as valuable taxation revenue streams as cross border service transactions continue to increase at a rapid pace. Of course the Government narrative often applies a euphemism that it is not about revenue generation, but rather stemming future revenue losses.

wsnz

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#1622313 4-Sep-2016 10:48

shk292:

But, the tax revenue to run the country has to come from somewhere - so getting it as GST on what is a purely discretionary "luxury" purchase such as Netflix seems quite fair. Better that than raising PAYE or an overall increase in GST

The implementation of GST and subsiquent rises were always proposed to occur with an accompaning decrease in other taxes, which so far that has held.

old3eyes

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#1622359 4-Sep-2016 12:21

wsnz:

shk292:

But, the tax revenue to run the country has to come from somewhere - so getting it as GST on what is a purely discretionary "luxury" purchase such as Netflix seems quite fair. Better that than raising PAYE or an overall increase in GST

The implementation of GST and subsiquent rises were always proposed to occur with an accompaning decrease in other taxes, which so far that has held.

Apart from the likes of motor fuel, alcohol and Tobacco which have steadily risen over the years.

Regards,

Old3eyes

mattwnz

20147 posts

Uber Geek

#1622396 4-Sep-2016 13:52

I see Adobe is now charging 15% gst on their creative suite. This is going to put the price up, which gets me thinking, why do companies like Adobe charge NZers far more than they do in other countries for exactly the same product and service? I could understand it if they were shipping the product in a box to NZ. But there is no reason for the price difference if it is a digital download.Does anyone know the justification?

Benoire

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Uber Geek

#1622435 4-Sep-2016 14:25

In some cases, the price difference is to do with how much the market can bare, e.g. in Russia there is generally considered to be large amounts of pirating so the companies charge less to ensure people are incentivised to purchase legal versions; also works with how much people earn...In some countries, software is priced at a point that makes it affordable for people... Which is why some games are bought using VPNs to Russian and brazil for example as they're cheaper due to overall salaries.

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