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15172 posts

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  # 1618306 27-Aug-2016 13:37
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rmt38:

 

freitasm:

 

And so it begins. SKype (Microsoft, ironically) sent out this today:

 

 

New Zealand GST changes

 

In order to meet recent changes to New Zealand tax requirements, Skype will be required to include the Goods and Services Tax (GST) for customers in New Zealand.

 

 

 

I got this as well.  I don't feel good about it.  That's not to say I am against GST being charged, what makes me feel uncomfortable about it is that I suspect they are not also paying tax on their earnings on NZ business?  It seems to me like one should go hand in hand with the other.

 

 

 

 

If they are collecting GST from kiwis, then the government will get that money. Unless they are offsetting it against GST incurring supplies, which they are buying from NZ suppliers. But how many of these types of companies are buying supplies from NZ companies, not too many I suspect. But GST is really a tax on the consumer buying the service, not on the company itself. But whether the comapnies will get it right is another question. I once puchased some quicktime software from Apple, and was charged Australian GST. I asked why they had done this and asked for it to be refunded. They did do this eventually after a lot of hassle But I wondered if I hadn't asked for it to be refunded, whether they would have kept it, because they shouldn't have charged an Australian tax on a NZ conusmer.


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  # 1618317 27-Aug-2016 14:14
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mattwnz:

 

 

 

 

 

If they are collecting GST from kiwis, then the government will get that money. Unless they are offsetting it against GST incurring supplies, which they are buying from NZ suppliers. But how many of these types of companies are buying supplies from NZ companies, not too many I suspect. ...

 

 

 

 

I suspect that most of them will be able to offset it against purchases. Don't forget if they have local staff, they have local expenses.


 
 
 
 


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  # 1618324 27-Aug-2016 14:25
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I don't think companies do this sort of thing just to avoid local taxes, By having all payments from around the world going to one place it would be a lot easier for them to manage than having individual bank accounts and payment processors in each country etc.


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  # 1618325 27-Aug-2016 14:29
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Yabanize:

 

I don't think companies do this sort of thing just to avoid local taxes, By having all payments from around the world going to one place it would be a lot easier for them to manage than having individual bank accounts and payment processors in each country etc.

 

 

What about when Amazon offers the option to charge in NZD, rather than USD?  That's another point for consideration.


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  # 1618326 27-Aug-2016 14:36
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Yabanize:

 

I don't think companies do this sort of thing just to avoid local taxes, By having all payments from around the world going to one place it would be a lot easier for them to manage than having individual bank accounts and payment processors in each country etc.

 

 

For you or me it might be easier, but these are vast multinational corporations. Because their turnover is so high they have the motivation to reduce their tax burden and all the resources to achieve it.

 

Yes , it is a sales tax on the consumer. Which seems unfair when the profit from that same service is offshored, depriving NZ of the tax income.

 

What we are experiencing is erosion of the tax base under globalisation. This results in higher taxes for wage earners and a cut in tax payer funded services.

 

All done under our noses and sometimes with our consent. 


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  # 1618331 27-Aug-2016 15:11
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mrdrifter:

 

mattwnz:

 

 

 

 

 

If they are collecting GST from kiwis, then the government will get that money. Unless they are offsetting it against GST incurring supplies, which they are buying from NZ suppliers. But how many of these types of companies are buying supplies from NZ companies, not too many I suspect. ...

 

 

 

 

I suspect that most of them will be able to offset it against purchases. Don't forget if they have local staff, they have local expenses.

 

 

I can't really see how, as as far as I am aware, they can only offset it against purchases that they are charged GST on. You don't pay GST on staff wages, so they couldn't offset it on staff. Maybe they could do itif the staff were contractors and they themselves charged GST. Maybe that is how they plan on doing it , I don't know.


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  # 1618333 27-Aug-2016 15:19
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mattwnz: I once puchased some quicktime software from Apple, and was charged Australian GST. I asked why they had done this and asked for it to be refunded. They did do this eventually after a lot of hassle

 

Interesting. I too was charged Australian GST and I asked for it back. Apple refused, and I didn't know how to progress it further so they're still $3 (or whatever it was) richer.


 
 
 
 


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  # 1618350 27-Aug-2016 16:02
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Yabanize:


I don't think companies do this sort of thing just to avoid local taxes, By having all payments from around the world going to one place it would be a lot easier for them to manage than having individual bank accounts and payment processors in each country etc.



I think to propose the Irish arrangement Apple, Microsoft and Google have is for anything other than tax minimisation is a nonsense.


Edit: And Apple has said as much.
https://theintercept.com/2016/08/16/ceo-tim-cook-decides-apple-doesnt-have-to-pay-corporate-tax-rate-because-its-unfair/





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  # 1618362 27-Aug-2016 16:33
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I'm not sure what service is being supplied in NZ.

 

 

 

If I use Skype on my computer to call another computer, there is no GST, but if I use it to call another phone there is GST. Seems odd as both services are more or less identical bar the end user device.






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  # 1618380 27-Aug-2016 17:02
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Geektastic:

 

I'm not sure what service is being supplied in NZ.

 

 

 

If I use Skype on my computer to call another computer, there is no GST, but if I use it to call another phone there is GST. Seems odd as both services are more or less identical bar the end user device.

 

 

Yes, don't think too hard.  I'm sure the politicians didn't when they came up with this.

 

 


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  # 1618399 27-Aug-2016 17:36
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Presumably if I went to, say, Greece and called a Greek landline with Skype, I'd be charged NZ GST because it's an NZ Skype account. Where's the logic in that?

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  # 1618522 27-Aug-2016 23:02
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Behodar: Presumably if I went to, say, Greece and called a Greek landline with Skype, I'd be charged NZ GST because it's an NZ Skype account. Where's the logic in that?

 

 

 

Arguably, where is the logic in GST at all? Why on earth should you pay a tax because you spent some money (on which you paid tax already) to buy something?






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  # 1618523 27-Aug-2016 23:03
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Will Amazon have to add GST to NZ Prime subs?






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  # 1618530 27-Aug-2016 23:26
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Geektastic:

 

Behodar: Presumably if I went to, say, Greece and called a Greek landline with Skype, I'd be charged NZ GST because it's an NZ Skype account. Where's the logic in that?

 

Arguably, where is the logic in GST at all? Why on earth should you pay a tax because you spent some money (on which you paid tax already) to buy something?

 

 

This is exactly what I think. I already pay tax on my monthly paycheck. Companies already pay tax on their revenue. GST is just a tax on expenses where I use money earn on already taxed income.





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