Government expected to move on 'Netflix tax'

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#1368324 18-Aug-2015 07:44

Davoid: At present I have a US Netflix (monthly) account (using Unotelly), so will I be charged GST with this type of account? and if so, would I then be better to change to Netflix NZ account?

David

No, if you had a NZ netflix account you would be charged GST, so keeping with the US will save you money (unless our dollar drops and it becomes more expensive). Im currently paying about NZD$12.60 a month for a US netflix account after currency conversion. I was going to cancel and sign up for a NZ one until I heard about this, I rather save a few bucks and keep the US one :)

vexxxboy

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#1368335 18-Aug-2015 08:08

Even Key in his interview admitted that it would only be feasible with the big companies, he said it would be impossible to collect GST from small independent oversea shops . This should just be called the Amazon Tax.

Common sense is not as common as you think.

DizzyD

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#1368339 18-Aug-2015 08:23

vexxxboy: Even Key in his interview admitted that it would only be feasible with the big companies, he said it would be impossible to collect GST from small independent oversea shops . This should just be called the Amazon Tax.

Keen to hear how this pans out.
Also keen to hear how its going to affect things that are sent to us from family overseas as gifts.

old3eyes

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#1368342 18-Aug-2015 08:37

Behodar: What's the bet that this'll result in another iTunes price hike?

I thought that we were already paying GST on iTunes.. I asked the question here a couple of years ago as to why itunes music was so expensive as US99c was way more than the exchange rate and i was told that you have to add GST to it here as there is no tax added in the US. Guess they were wrong and it was exchange rate and kiwi tax..

I also hear Hosking on Newstalk ZB today saying how wonderful this tax was and then he had someone from the retail sector who was whining on about the lack of level playing field in the retail industry and the Gov needed to move fast and changing it for everything saying that all other counties already do but didn't mention what countries. Hosking of course agreed with him as I'm sure he has enough money not to care about the plebs..

Regards,

Old3eyes

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#1368346 18-Aug-2015 08:44

MikeB4: On the mid range Netflix GST will add less than $2.00 per month, I am not going to lose sleep over this. I don't buy often from off shore so again not a biggie for me

Bet the second after this happens Lighbox will increase their prices back to what it was..

Regards,

Old3eyes

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#1368369 18-Aug-2015 09:12

old3eyes:

Bet the second after this happens Lighbox will increase their prices back to what it was..

Or keep them at the current price and have a competitive advantage in the marketplace. Could go either way.

Behodar

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#1368373 18-Aug-2015 09:19

old3eyes: I thought that we were already paying GST on iTunes.. I asked the question here a couple of years ago as to why itunes music was so expensive as US99c was way more than the exchange rate and i was told that you have to add GST to it here as there is no tax added in the US. Guess they were wrong and it was exchange rate and kiwi tax..

Apparently John Key gave iTunes as an example, so it looks like there's no GST paid at present. The iTunes T&Cs only say that GST "may" be payable:

Services Transactions may be subject to GST. If GST is payable, the amount deducted from your credit card, iTunes Card, iTunes Store Gift Certificate, or Allowance Account balance (as the case may be) at the time of purchase will include applicable GST.All sales and rentals of products are final.

Sharesies

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PolicyGuy

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#1368374 18-Aug-2015 09:21

oxnsox:
Because probably 90% oin folk aren't as geeky clever as you and subscribe to local Netflix.
But really its about the bigger tax take of GST on all on line (offshore) transactions. Which will net $$$$$$$

The increased tax take will be a minor (but not unwelcome) benefit to the Government.
The important aspect is removing the tax & hence price disadvantage that SkyTV has relative to Netflix. The Sky Entertainment group appears to be high up on the government's priorities list.

geekiegeek

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#1368379 18-Aug-2015 09:29

old3eyes:
Behodar: What's the bet that this'll result in another iTunes price hike?

I thought that we were already paying GST on iTunes.. I asked the question here a couple of years ago as to why itunes music was so expensive as US99c was way more than the exchange rate and i was told that you have to add GST to it here as there is no tax added in the US. Guess they were wrong and it was exchange rate and kiwi tax..

I also hear Hosking on Newstalk ZB today saying how wonderful this tax was and then he had someone from the retail sector who was whining on about the lack of level playing field in the retail industry and the Gov needed to move fast and changing it for everything saying that all other counties already do but didn't mention what countries. Hosking of course agreed with him as I'm sure he has enough money not to care about the plebs..

Do you use any public services in this country? If so why are you seemingly so against paying your fair share of tax.

I personally don't believe this has anything to do with helping out the poor local retailer - that's just a bonus for politicians. What this is about is increasing the tax take as we enter a time of large scale retirement and not enough people to pay for it (plus all the other things your taxes pay for).

Sure I'm not happy about stuff from overseas costing more but the way I see it we were just lucky to have a free ride for a while and now its time to pay our share. I mean imagine if everyone shopped overseas and no one payed any gst.

DizzyD

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#1368407 18-Aug-2015 09:52

geekiegeek:

Do you use any public services in this country? If so why are you seemingly so against paying your fair share of tax.

I personally don't believe this has anything to do with helping out the poor local retailer - that's just a bonus for politicians. What this is about is increasing the tax take as we enter a time of large scale retirement and not enough people to pay for it (plus all the other things your taxes pay for).

Sure I'm not happy about stuff from overseas costing more but the way I see it we were just lucky to have a free ride for a while and now its time to pay our share. I mean imagine if everyone shopped overseas and no one payed any gst.

I'm all for paying gst on services/goods sold/bought/developed/made in New Zealand.

Why should I pay gst on something that is not even supplied by a NZ business? Its no different to going overseas on holiday and purchasing that service or those goods while over there.

Let the market work itself out without any government intervention. I believe that certain goods/services are cheaper here in NZ because of the cheaper overseas prices.

mdooher

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#1368411 18-Aug-2015 09:58

reven:
Davoid: At present I have a US Netflix (monthly) account (using Unotelly), so will I be charged GST with this type of account? and if so, would I then be better to change to Netflix NZ account?

David

No, if you had a NZ netflix account you would be charged GST, so keeping with the US will save you money (unless our dollar drops and it becomes more expensive). Im currently paying about NZD$12.60 a month for a US netflix account after currency conversion. I was going to cancel and sign up for a NZ one until I heard about this, I rather save a few bucks and keep the US one :)

If you buy Netflix on your US account you will have paid US tax. If you have paid US tax you are not required to pay GST anyway. This is why it is such a difficult tax to collect via the banks, they don't know if tax has already been paid.

And another way of looking at it:

Put it this way, I pay for a service "Netflix" in the US. The terms and conditions of this service state I may not use that service in NZ. This is absolutely not subject to GST. If IRD wants to charge me for tax for use of the service here, they will need to prove I used it here. How? get and electronic interception warrant and ask the GCSB for help...yeah right

Matthew

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#1368420 18-Aug-2015 10:07

mdooher:
If you buy Netflix on your US account you will have paid US tax. If you have paid US tax you are not required to pay GST anyway. This is why it is such a difficult tax to collect via the banks, they don't know if tax has already been paid.

As far as I know this is what is changing.
You will be required to pay two sets of tax. US GST and NZ GST on the same item.

The same goes for goods imported from overseas. If you have already paid the overseas GST/VAT. You will also need to pay the NZ GST once the item arrives here in NZ.

Bee

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#1368422 18-Aug-2015 10:10

I'm pretty sure that Netflix indicated that they would pay GST if required without any price increase to the customer? That's they way I would like to see it, or at least an increase much less than 15%...

The impact on other overseas purchases is much more concerning, but with the exchange rate at the moment its not even worth buying anything from overseas???

Doing your best is much more important than being the best.

mdooher

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#1368423 18-Aug-2015 10:13

I love how the retailers are screaming that its not a fair playing field...of course it is. No one is stopping them selling their products online in the US. lightbox is able to buy the US rights to programs and screen them there if they want to. It may not be viable but that's capitalism for you.

Matthew

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#1368425 18-Aug-2015 10:15

DizzyD:
mdooher:
If you buy Netflix on your US account you will have paid US tax. If you have paid US tax you are not required to pay GST anyway. This is why it is such a difficult tax to collect via the banks, they don't know if tax has already been paid.

As far as I know this is what is changing.
You will be required to pay two sets of tax. US GST and NZ GST on the same item.

The same goes for goods imported from overseas. If you have already paid the overseas GST/VAT. You will also need to pay the NZ GST once the item arrives here in NZ.

Exports are zero rated for tax. Unless you are domestic shipping within the US and then reshipping (such as youshop) anything that is shipped from a country is tax exempt. Actually it is more complex than that. Some US States don't have Sales tax. This is why Youshop is in Portland. When you buy something to ship it to Portland there is no sales tax added.

My views (except when I am looking out their windows) are not those of my employer.

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