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15110 posts

Uber Geek


  # 1368713 18-Aug-2015 16:07
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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.  .

 I wonder if it has anything to do with the TPP, and changing the law on this now to soften the blow of a TPP clause. Essentially it looks like it may prevent people signing up to paid services that aren't available to the NZ market, unless you use some form of geo blocker. I guess people could send the govermnet a cheque for the GST amount? I am all for paying GST on imported stuff.

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  # 1368969 19-Aug-2015 02:17
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The surprising thing may be retailers thinking their revenues might go up if this tax comes into effect.

 
 
 
 


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  # 1368984 19-Aug-2015 07:04
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NonprayingMantis: 

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.


nope, this doesn't address the big issue of using accounting trickery and tax havens to shift profits to places Ireland where they pay little to no tax. 

Two different things, GST and income tax. 

Hmm, what to write...
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  # 1369026 19-Aug-2015 08:37
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browned:
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.


The important bit is: if a consumer knowingly supplied incorrect information to a supplier in order to avoid being charged GST

This means you must be giving an incorrect address for the purposes of avoiding GST... if you are doing it fro some other reason...go for it






Matthew


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  # 1369027 19-Aug-2015 08:46
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I am waiting for there to be an amendment/rewrite to disallow the use of Geo-Unblocking services, so that Spark and sky can have a "fair go"... it's obvious that you could fight this if you are paying GST, as it's only about the tax, but if there is a new law or an amendment to this one that then makes geo-unblocking an offence, it'll be goodnight nurse for those who want better services.






Handsome Dan Has Spoken.

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  # 1369034 19-Aug-2015 09:01
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There has clearly been a lot of energetic lobbying of the Beehive going on.




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Master Geek


  # 1369080 19-Aug-2015 09:51
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How are the ird going to be able to detect somebody accessing netflix within NZ but paying with a non NZ credit card?

 
 
 
 


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Ultimate Geek
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  # 1369081 19-Aug-2015 09:53
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Handsomedan: I am waiting for there to be an amendment/rewrite to disallow the use of Geo-Unblocking services, so that Spark and sky can have a "fair go"... it's obvious that you could fight this if you are paying GST, as it's only about the tax, but if there is a new law or an amendment to this one that then makes geo-unblocking an offence, it'll be goodnight nurse for those who want better services.




They can probably make Geo-Unblocking an offence. 

But they cannot make VPN's (which actually do the same thing) an offence. Its how many businesses work these days.


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  # 1369097 19-Aug-2015 10:01
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So is Unotelly a VPN or Geo-unblocking?




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Ultimate Geek
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  # 1369104 19-Aug-2015 10:07
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kiwifidget: So is Unotelly a VPN or Geo-unblocking?


Unotelly (DNS unblocking) and VPN's are both just different ways to achieve the same result (geo-unblocking).

Unotelly also supplies a VPN service. 

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Ultimate Geek


  # 1369109 19-Aug-2015 10:18
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natlukros: How are the ird going to be able to detect somebody accessing netflix within NZ but paying with a non NZ credit card?


IRD are highly unlikely to put any systems in place to detect that type of activity. The NZ taxation system relies primarily on honesty, so the primary method of detection is likely to be part of random/targeted audits.

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Master Geek


  # 1369150 19-Aug-2015 10:32
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Let alone somebody visiting from overseas and watching from their overseas netflix account.

Also what about using a free overseas service to watch something (say ITV to watch uefa champions league football) instead of the skyNZ content which has a gst component in the subsription.

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  # 1369154 19-Aug-2015 10:37
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natlukros: Let alone somebody visiting from overseas and watching from their overseas netflix account.

Also what about using a free overseas service to watch something (say ITV to watch uefa champions league football) instead of the skyNZ content which has a gst component in the subsription.

The discussion document is pretty clear about that situation, that GST would only apply on cross-border services and intangibles supplied to a New Zealand-resident.

No problem using free services, because 15% of $0 is $0. I'm not sure what your point is here?

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Master Geek


  # 1369157 19-Aug-2015 10:39
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Just that sky for example would still be unhappy as they have to pay gst on the content but that the alternative stream being free does not attract a gst.

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Ultimate Geek


  # 1370627 19-Aug-2015 23:25
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Actually that is pretty much what the TPPA is all about. Any firm that is legitimately selling goods in NZ can use the TPPA to prevent anyone in NZ from parallel importing.
 

 

Not unless the yanks have got the TPP to state "No Parallel Importing"




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