Government expected to move on 'Netflix tax'

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#1368635 18-Aug-2015 14:33

elpenguino: All the figures look like small potatoes.
Why aren't they chasing the multinationals like facebook apple etc who freely admit they pay next to no tax at all for operating directly in NZ?

Why do they roll over and take it up the heiny from these guys and stiff the man on the street 2 bucks a month on his Netflix?

They ARE going after the big multinationals. They specifically talk about Netflix and iTunes.

If Netflix doesn't meet your definition of a big multinational, then I would love to know what does.

mdooher

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#1368641 18-Aug-2015 14:41

I would imagine one of the largest sources of overseas goods is Aliexpress. but since that is run just Trademe for but for new stuff, good luck on getting every one of those traders to sign up to pay GST.

This is probably why they are going for the easy stuff like Netflix and iTunes first

Matthew

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#1368646 18-Aug-2015 14:51

mdooher:
StarBlazer:
msreef: From stuff.co.nz
"The tax would be collected automatically but consumers who managed to avoid paying GST on imported services, for example, by tricking suppliers into thinking they lived outside the country, could be fined up to $25,000. "

That's a bit of an excessive fine!

So just to clarify (and troll); If I want to pay for a digital service that I can't get in NZ, there is going to be a chance that I may be accused of GST avoidance and fined up to $25,000?

No that is stuff being dramatic, The white paper basically says you get the fine if you go out of your way to avoid the tax. e.g. saying you are GST registered business and you are not, or saying you are non resident in New Zealand to avoid the tax

That's the point though, to get the content I have to say that I am a resident of the US or UK etc - therefore am I avoiding paying GST. I guess what it will depend on is whether the company also operates from NZ, like Netflix.

Example 1:
If I pay Netflix NZ my monthly fee but use a DNS to access the content in the USA then both Netflix and I are fulfilling our GST obligations. If however I decide to pay Netflix US directly I'm not - I'm probably avoiding paying GST.

Example 2:
Amazon do not offer Amazon Prime to NZ residents. If I use a DNS and pretend to be in the US both for traffic and billing purposes (using a currency card for example) will I fall foul of the law. Could Sky/Spark argue that the content being offered on Amazon is also (albeit partly) being offered by a domestic supplier and so again, I'm avoiding GST.

Procrastination eventually pays off.

old3eyes

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#1368647 18-Aug-2015 14:55

bazzer:
DizzyD: 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.

It sounds a bit like you're confusing GST and tariff duty.

GST is not about protecting the local economy as such. It's more like a tax on consumption. You should pay GST on something that is not even supplied by a NZ business because you are consuming the service in NZ.

And, actually, if you purchase goods while overseas (obviously not services since you will use that service outside NZ) and bring them back with you, you can be required to pay GST on those.

Why would I be charged GST twice then?? I buy something like cloths in Ozz , pay 10% GST there and then get stung here for another 15%. You're dreaming..

Regards,

Old3eyes

mdooher

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#1368651 18-Aug-2015 14:58

StarBlazer:
mdooher:
StarBlazer:
msreef: From stuff.co.nz
"The tax would be collected automatically but consumers who managed to avoid paying GST on imported services, for example, by tricking suppliers into thinking they lived outside the country, could be fined up to $25,000. "

That's a bit of an excessive fine!

So just to clarify (and troll); If I want to pay for a digital service that I can't get in NZ, there is going to be a chance that I may be accused of GST avoidance and fined up to $25,000?

No that is stuff being dramatic, The white paper basically says you get the fine if you go out of your way to avoid the tax. e.g. saying you are GST registered business and you are not, or saying you are non resident in New Zealand to avoid the tax

That's the point though, to get the content I have to say that I am a resident of the US or UK etc - therefore am I avoiding paying GST. I guess what it will depend on is whether the company also operates from NZ, like Netflix.

Example 1:
If I pay Netflix NZ my monthly fee but use a DNS to access the content in the USA then both Netflix and I are fulfilling our GST obligations. If however I decide to pay Netflix US directly I'm not - I'm probably avoiding paying GST.

Example 2:
Amazon do not offer Amazon Prime to NZ residents. If I use a DNS and pretend to be in the US both for traffic and billing purposes (using a currency card for example) will I fall foul of the law. Could Sky/Spark argue that the content being offered on Amazon is also (albeit partly) being offered by a domestic supplier and so again, I'm avoiding GST.

In both cases you are simply buying something you cannot get here, you are are not engaging in "tax avoidance" you have to lie about your address for the purposes of avoiding the tax.

The way the Gov't is going is that if your residence is here you pay tax on digital downloads even if you use them while traveling. (this is what the EU is looking at). So with Netflix US you say you live in the US to get the content but pay with an NZ credit card then Netflix must assume you live in NZ for tax purposes and pay GST...at least that's want the IRD want.

Matthew

mdooher

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#1368653 18-Aug-2015 15:00

old3eyes:
bazzer:
DizzyD: 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.

It sounds a bit like you're confusing GST and tariff duty.

GST is not about protecting the local economy as such. It's more like a tax on consumption. You should pay GST on something that is not even supplied by a NZ business because you are consuming the service in NZ.

And, actually, if you purchase goods while overseas (obviously not services since you will use that service outside NZ) and bring them back with you, you can be required to pay GST on those.

Why would I be charged GST twice then?? I buy something like cloths in Ozz , pay 10% GST there and then get stung here for another 15%. You're dreaming..

dead right. this is why customs doesn't ping you for GST. BUT if you are over the threshold you can get your AUS GST refunded and pay NZ GST

Matthew

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#1368656 18-Aug-2015 15:03

old3eyes:
bazzer:
DizzyD: 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.

It sounds a bit like you're confusing GST and tariff duty.

GST is not about protecting the local economy as such. It's more like a tax on consumption. You should pay GST on something that is not even supplied by a NZ business because you are consuming the service in NZ.

And, actually, if you purchase goods while overseas (obviously not services since you will use that service outside NZ) and bring them back with you, you can be required to pay GST on those.

Why would I be charged GST twice then?? I buy something like cloths in Ozz , pay 10% GST there and then get stung here for another 15%. You're dreaming..

If goods are exported out of Australia there is no requirement for the retailer to charge you GST. If they're charging you Australian GST you should really be taking it up with them as to why they're doing this.

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old3eyes

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#1368660 18-Aug-2015 15:07

sbiddle:
old3eyes:
bazzer:
DizzyD: 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.

It sounds a bit like you're confusing GST and tariff duty.

GST is not about protecting the local economy as such. It's more like a tax on consumption. You should pay GST on something that is not even supplied by a NZ business because you are consuming the service in NZ.

And, actually, if you purchase goods while overseas (obviously not services since you will use that service outside NZ) and bring them back with you, you can be required to pay GST on those.

Why would I be charged GST twice then?? I buy something like cloths in Ozz , pay 10% GST there and then get stung here for another 15%. You're dreaming..

If goods are exported out of Australia there is no requirement for the retailer to charge you GST. If they're charging you Australian GST you should really be taking it up with them as to why they're doing this.

And I go to say Harbourtown in the Gold Coast and buy some cloths. Oh pleaze mr retailer I come from NZ , I want to take these back with me so i don't want to pay GST on these . Guess what they'll say..

Regards,

Old3eyes

mdooher

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#1368664 18-Aug-2015 15:09

old3eyes:
sbiddle:
old3eyes:
bazzer:
DizzyD: 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.

It sounds a bit like you're confusing GST and tariff duty.

GST is not about protecting the local economy as such. It's more like a tax on consumption. You should pay GST on something that is not even supplied by a NZ business because you are consuming the service in NZ.

And, actually, if you purchase goods while overseas (obviously not services since you will use that service outside NZ) and bring them back with you, you can be required to pay GST on those.

Why would I be charged GST twice then?? I buy something like cloths in Ozz , pay 10% GST there and then get stung here for another 15%. You're dreaming..

If goods are exported out of Australia there is no requirement for the retailer to charge you GST. If they're charging you Australian GST you should really be taking it up with them as to why they're doing this.

And I go to say Harbourtown in the Gold Coast and buy some cloths. Oh pleaze mr retailer I come from NZ , I want to take these back with me so i don't want to pay GST on these . Guess what they'll say..

they will give you a receipt, If the individual item is over $600 (I think) you show it at customs before you leave Aus and they refund you the GST

Matthew

geekiegeek

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#1368666 18-Aug-2015 15:11

old3eyes:
sbiddle:
old3eyes:
bazzer:
DizzyD: 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.

It sounds a bit like you're confusing GST and tariff duty.

GST is not about protecting the local economy as such. It's more like a tax on consumption. You should pay GST on something that is not even supplied by a NZ business because you are consuming the service in NZ.

And, actually, if you purchase goods while overseas (obviously not services since you will use that service outside NZ) and bring them back with you, you can be required to pay GST on those.

Why would I be charged GST twice then?? I buy something like cloths in Ozz , pay 10% GST there and then get stung here for another 15%. You're dreaming..

If goods are exported out of Australia there is no requirement for the retailer to charge you GST. If they're charging you Australian GST you should really be taking it up with them as to why they're doing this.

And I go to say Harbourtown in the Gold Coast and buy some cloths. Oh pleaze mr retailer I come from NZ , I want to take these back with me so i don't want to pay GST on these . Guess what they'll say..

Thats not really NZ IRDs fault though is it.

bazzer

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#1368697 18-Aug-2015 15:23

old3eyes:
bazzer:
DizzyD: 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.

It sounds a bit like you're confusing GST and tariff duty.

GST is not about protecting the local economy as such. It's more like a tax on consumption. You should pay GST on something that is not even supplied by a NZ business because you are consuming the service in NZ.

And, actually, if you purchase goods while overseas (obviously not services since you will use that service outside NZ) and bring them back with you, you can be required to pay GST on those.

Why would I be charged GST twice then?? I buy something like cloths in Ozz , pay 10% GST there and then get stung here for another 15%. You're dreaming..

Not at all, the fact you had to pay GST in Australia is your problem. As mentioned above, Australia, for example, have a Tourist Refund Scheme that "lets you claim a refund of the Goods and Services Tax (GST) and Wine Equalisation Tax (WET) that you pay on certain goods you buy in Australia and then take out of Australia with you". I don't know why we don't have the same thing here.

Clothes are an interesting case because there's a concession for "wearing apparel and personal effects". Read about it all here. So, you don't have to pay GST on the clothes as long as they are intended for your own use or wear and personally owned by you and not intended for any other person or persons and not intended for gift, sale or exchange. So, those shoes you bring back for your daughter? Possibly need to pay GST on that.

However, you also get a $700 personal concession so I guess they come under that.

This is all in the passenger arrival card you sign when you come back in. You do read that before ticking "no" and signing the statutory declaration, right?

DizzyD

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#1368702 18-Aug-2015 15:33

sbiddle:

If goods are exported out of Australia there is no requirement for the retailer to charge you GST. If they're charging you Australian GST you should really be taking it up with them as to why they're doing this.

Problem here is that retailers need to be listed as exporters to do this. Most are not.

retailer has to charge GST. Unless they are setup for exporting.

sbiddle

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#1368703 18-Aug-2015 15:35

old3eyes:

And I go to say Harbourtown in the Gold Coast and buy some cloths. Oh pleaze mr retailer I come from NZ , I want to take these back with me so i don't want to pay GST on these . Guess what they'll say..

They'll say thank you for visiting Australia and give you a refund at the airport providing you meet the refund requirements.

DizzyD

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#1368704 18-Aug-2015 15:38

sbiddle:
old3eyes:

And I go to say Harbourtown in the Gold Coast and buy some cloths. Oh pleaze mr retailer I come from NZ , I want to take these back with me so i don't want to pay GST on these . Guess what they'll say..

They'll say thank you for visiting Australia and give you a refund at the airport providing you meet the refund requirements.

Here the requirements.

https://www.border.gov.au/Trav/Ente/Tour/Are-you-a-traveller

browned

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#1368708 18-Aug-2015 15:46

StarBlazer: That's the point though, to get the content I have to say that I am a resident of the US or UK etc - therefore am I avoiding paying GST. I guess what it will depend on is whether the company also operates from NZ, like Netflix.

Example 1:
If I pay Netflix NZ my monthly fee but use a DNS to access the content in the USA then both Netflix and I are fulfilling our GST obligations. If however I decide to pay Netflix US directly I'm not - I'm probably avoiding paying GST.

Example 2:
Amazon do not offer Amazon Prime to NZ residents. If I use a DNS and pretend to be in the US both for traffic and billing purposes (using a currency card for example) will I fall foul of the law. Could Sky/Spark argue that the content being offered on Amazon is also (albeit partly) being offered by a domestic supplier and so again, I'm avoiding GST.

I agree, section 7.14 below suggests to me that if the nz consumer says they are from the US to buy US netflix then they could be fined for knowningly avoiding tax. This almost seems like a geoblocking enforcement law. But as long as you paid NZ Netflix with GST they don't care what you watch.

7.14 There is a risk that some consumers may incorrectly represent themselves as a registered business customer (if business-to-business supplies are excluded) or a resident consumer of another country and avoid being charged GST.

7.15 There are two ways this issue could be addressed:
- First, existing “knowledge offences” could apply if a consumer knowingly supplied incorrect information to a supplier in order to avoid being charged GST
- Secondly, it is proposed that the Commissioner of Inland Revenue have the discretion (which is expected to be limited to more egregious cases) to require the consumer to register for GST and treat the consumer as having made the supply from the time the recipient purchased the service.

7.16 The knowledge offences apply when a person knowingly provides altered, false, incomplete, or misleading information to any person in respect of a tax law or a matter or thing relating to a tax law. A person convicted of a knowledge offence is liable to a fine up to NZ$25,000 for a first-time offence, or NZ$50,000 for repeated offences.

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