Government expected to move on 'Netflix tax'

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284 posts

Ultimate Geek

#1644133 2-Oct-2016 13:30

ajobbins:

So AWS should be the same then. I did think their solution of 'enter your GST number and we wont charge you GST' was interesting in case - that's not generally how it works.

Correct, but to entice offshore suppliers to collect GST on their supplies to New Zealand residents, some administrative simplicity was allowed.

If an individual provides an offshore supplier with altered, false, or misleading information as to their residence in New Zealand or their status as being GST-registered, they can be liable for the GST that should have been paid on those supplies (in addition to penalties and interest) [reference]. Additionally, an individual could be criminally convicted of a 'knowledge offence', with a maximum penality of $25,000 for a first time offence [reference].

Edit: clarification

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ajobbins

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#1644138 2-Oct-2016 13:36

In any case, I guess AWS, Azure, Office365 etc now will also drop any GST thing entirely

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PhantomNVD

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#1644170 2-Oct-2016 14:21

Yatey:
If an individual provides an offshore supplier with altered, false, or misleading information as to their residence in New Zealand or their status as being GST-registered, they can be liable for the GST that should have been paid on those supplies (in addition to penalties and interest) [reference]. Additionally, an individual could be criminally convicted of a 'knowledge offence', with a maximum penality of $25,000 for a first time offence [reference].

Edit: clarification

So will this end up being the new "3 strikes" law which scares the general population into paying it is never actually brought to trial to be proven in law?

Much like the $650,000 fine for public viewing of this DVD type notices?

JimmyH

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#1644878 3-Oct-2016 19:03

PhantomNVD:

So will this end up being the new "3 strikes" law which scares the general population into paying it is never actually brought to trial to be proven in law?

Much like the $650,000 fine for public viewing of this DVD type notices?

Possibly.

But I wouldn't want to mess with IRD. They are much nastier, and with much greater powers than the copyright litigants or the police prosecutors in NZ. If they think you are fiddling the tax system, they grab you by the throat and don't let go. I would probably prefer to be offside with the Mongrel Mob ......

NonprayingMantis

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#1644891 3-Oct-2016 19:36

JimmyH:
PhantomNVD:

So will this end up being the new "3 strikes" law which scares the general population into paying it is never actually brought to trial to be proven in law?

Much like the $650,000 fine for public viewing of this DVD type notices?

Possibly.

But I wouldn't want to mess with IRD. They are much nastier, and with much greater powers than the copyright litigants or the police prosecutors in NZ. If they think you are fiddling the tax system, they grab you by the throat and don't let go. I would probably prefer to be offside with the Mongrel Mob ......

The IRD are not going to waste time on pursuing people who have avoided paying ~$18 a year on gst by using USA Netflix. They have a lot better things to be doing and bigger fish to fry.

Yabanize

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#1644909 3-Oct-2016 20:11

NonprayingMantis:
JimmyH:

PhantomNVD:

So will this end up being the new "3 strikes" law which scares the general population into paying it is never actually brought to trial to be proven in law?

Much like the $650,000 fine for public viewing of this DVD type notices?

Possibly.

But I wouldn't want to mess with IRD. They are much nastier, and with much greater powers than the copyright litigants or the police prosecutors in NZ. If they think you are fiddling the tax system, they grab you by the throat and don't let go. I would probably prefer to be offside with the Mongrel Mob ......

The IRD are not going to waste time on pursuing people who have avoided paying ~$18 a year on gst by using USA Netflix. They have a lot better things to be doing and bigger fish to fry.

Like cashies

Asmodeus

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#1644915 3-Oct-2016 20:29

PhantomNVD: Well I have yet to get the email, though I've had one just today about new movies added, maybe it's cos I started as a USA client and have a US "home" address even though paying via NZ MasterCard now?

I was wondering the same. I used a DNS to sign up to US Netflix using US Youshop address. No email here yet either but I guess it could still be coming

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PhantomNVD

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#1644951 3-Oct-2016 22:20

Asmodeus:
PhantomNVD: Well I have yet to get the email, though I've had one just today about new movies added, maybe it's cos I started as a USA client and have a US "home" address even though paying via NZ MasterCard now?

I was wondering the same. I used a DNS to sign up to US Netflix using US Youshop address. No email here yet either but I guess it could still be coming

Is yours also a local card?

Linuxluver

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#1645010 4-Oct-2016 07:57

I seem to have a Canadian Netflix account for some reason.

I wonder if GST will be appear on it?

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Benoire

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#1645045 4-Oct-2016 09:11

I suspect for Netflix, if you've not been transferred to a NZ account then for them you're still classed as the country of signup and therefore won't be caught by GST, but probably by the local countries/states sales tax instead. As IRD would have no way of confirming this without looking at your expenditure then you should continue to see the same price.

NonprayingMantis

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#1645055 4-Oct-2016 09:31

Anybody got the letter from Netflix? Can you post the text if it here? Are they blaming the price rise on gst?

richms

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#1645088 4-Oct-2016 10:25

Quoted by stuff here. Lol.

Richard rich.ms

SirHumphreyAppleby

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#1645091 4-Oct-2016 10:32

PhantomNVD:
Asmodeus:

PhantomNVD: Well I have yet to get the email, though I've had one just today about new movies added, maybe it's cos I started as a USA client and have a US "home" address even though paying via NZ MasterCard now?

I was wondering the same. I used a DNS to sign up to US Netflix using US Youshop address. No email here yet either but I guess it could still be coming

Is yours also a local card?

I originally had a US Netflix account, and changed to a NZ address when it became cheaper to pay in NZD. I have always paid with a NZ credit card.

My October bill clearly states I am paying in NZD, including tax of 15%, but the total price hasn't been bumped up yet, nor have I received any notice of an increase. They'd better tell me today though, otherwise they'll be in breach of the 30 day notice period if they increase the price next month.

SirHumphreyAppleby

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#1645172 4-Oct-2016 12:24

NonprayingMantis: Anybody got the letter from Netflix? Can you post the text if it here? Are they blaming the price rise on gst?

Just got the e-mail. Yes, they are blaming GST. Technically, it's a lie, as the October payment also included 15% GST.

Due to changes in New Zealand GST laws for online services, starting on Thursday, November 3rd, 2016 your Netflix price will include a 15% tax. Your new price will be NZ$14.99 per month. We hope you continue to enjoy the TV shows and movies you love on Netflix.

Please visit netflix.com to review the details of this change and your options for plans and prices.

As always, if you have questions, we are here to help. Please visit the Help Center for more information or contact us now.

–The Netflix Team

NonprayingMantis

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#1645221 4-Oct-2016 13:10

SirHumphreyAppleby:

NonprayingMantis: Anybody got the letter from Netflix? Can you post the text if it here? Are they blaming the price rise on gst?

Just got the e-mail. Yes, they are blaming GST. Technically, it's a lie, as the October payment also included 15% GST.

--

Due to changes in New Zealand GST laws for online services, starting on Thursday, November 3rd, 2016 your Netflix price will include a 15% tax. Your new price will be NZ$14.99 per month. We hope you continue to enjoy the TV shows and movies you love on Netflix.

Please visit netflix.com to review the details of this change and your options for plans and prices.

As always, if you have questions, we are here to help. Please visit the Help Center for more information or contact us now.

–The Netflix Team

I remember in NZ when GST changed from 12.5 to 15%, several businesses got raked over the coals for doing that, when they increased their pricing by a little more than the tax change justified - squeezing more money out of the customer and claiming it is down to the tax.

I wondered if this might be the case. It's quite illegal for a company to claim a price rise is down to GST if the change doesn't accurately reflect that tax.

In this case, $14.99 less GST is actually $13.03. The price before GST came in was $12.99 So netflix are getting an extra 4c out of every subscription on the basis of a lie. (may not sound like much, but add that up over a large number of subscribers).

It's also the principle of the matter. You are allowed to change prices on your products for whatever reason you want. You don't even have to tell customers why you are changing if you don't want to. HOWEVER, if you decide to tell your customers why the price is changing, you aren't allowed to lie about it.

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