Netflix Tax

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Forums › Finance and wealth management › Netflix Tax

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SaltyNZ

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#1527935 7-Apr-2016 20:00

Linuxluver:

Easy if they look at your method of payment and where the money went and send you a bill for the tax.

Great, so now the government gets a real-time feed of all your financial transactions without needing a warrant. There are people at the GCSB literally having heart attacks in excitement at the thought right now.

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sir1963

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#1527984 7-Apr-2016 20:57

roobarb:

how on earth can the NZ government force them to pay taxes on that sale?

Because all a government has to do is to pass laws?

The rationale is if you imported a DVD through Amazon you would have to pay GST, so why not virtual products?

Actually I import a reasonable amount and don't get charged GST (yet)

sir1963

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#1527988 7-Apr-2016 21:07

Linuxluver:

Geektastic: Just read that this is likely to become law shortly.

What I can't quite see is how it can be enforced.

If a foreign company sells an intangible product downloaded from a server outside NZ, how on earth can the NZ government force them to pay taxes on that sale?

Easy if they look at your method of payment and where the money went and send you a bill for the tax. Bitcoin might be the only exception. Pretty much everything else is nailed down tight these days.

Credit card transactions can be easily monitored and assessed for tax. You'd likely then have to prove you didn't buy anything taxable.

They'd probably have a $25 charge for appealing. You know how this goes. We already know they watch every transaction. Just try sending money to the Ukraine by ANY means (other than Bitcoin or cash courier)

And if I choose to send some $ to a niece for her Birthday ?

How about donations to international causes ?

What about when I travel , a hotel booked though a NZ travel agent will incur GST, one booked while I am overseas won't .

Cash withdrawals while overseas ?

Truth is, the government will spend a significant sum of money try to claim the GST. It will NOT stop me from buying overseas simply because the markups on many good are MASSIVE in NZ, so even with GST its cheaper to import.

And if they clamp down on the small guy, why not clamp down on the likes of Apple, Google, Microsoft, etc etc all using "licensing fees" to siphon off taxable income to tax free havens.

tdgeek

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#1527992 7-Apr-2016 21:23

sir1963:

Linuxluver:

Geektastic: Just read that this is likely to become law shortly.

What I can't quite see is how it can be enforced.

If a foreign company sells an intangible product downloaded from a server outside NZ, how on earth can the NZ government force them to pay taxes on that sale?

Easy if they look at your method of payment and where the money went and send you a bill for the tax. Bitcoin might be the only exception. Pretty much everything else is nailed down tight these days.

Credit card transactions can be easily monitored and assessed for tax. You'd likely then have to prove you didn't buy anything taxable.

They'd probably have a $25 charge for appealing. You know how this goes. We already know they watch every transaction. Just try sending money to the Ukraine by ANY means (other than Bitcoin or cash courier)

And if I choose to send some $ to a niece for her Birthday ?

How about donations to international causes ?

What about when I travel , a hotel booked though a NZ travel agent will incur GST, one booked while I am overseas won't .

Cash withdrawals while overseas ?

Truth is, the government will spend a significant sum of money try to claim the GST. It will NOT stop me from buying overseas simply because the markups on many good are MASSIVE in NZ, so even with GST its cheaper to import.

And if they clamp down on the small guy, why not clamp down on the likes of Apple, Google, Microsoft, etc etc all using "licensing fees" to siphon off taxable income to tax free havens.

Im pretty sure that Apple purchases attract GST. If you buy Windows that attracts GST. The Govt could remove GST, then ego back to other taxes. At the end of the day, NZ needs an income as you and I do

Geektastic

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#1528009 7-Apr-2016 22:00

JamesL:

I'm surprised they haven't waited for another natural disaster to rush in some new laws...

HAARP is under repair just now....

Geektastic

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#1528025 7-Apr-2016 22:07

I can see that there may be methods to charge us tax.

I still don't think the NZ government has any ability in law to tax and enforce against companies domiciled in other places that have no physical base in NZ at all. Heck, in the USA they even manage to move businesses to states that have no sales tax to take advantage of that and that is in the same country.

Personally I think it is a ridiculous idea rooted in the ravings of people who think it will solve some kind of problem and that if we can but extract all the tax the government is "owed" then we will live in a land of milk and honey and want for nothing. Which is of course BLX.

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tdgeek

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#1528155 8-Apr-2016 09:18

Geektastic:

I can see that there may be methods to charge us tax.

I still don't think the NZ government has any ability in law to tax and enforce against companies domiciled in other places that have no physical base in NZ at all. Heck, in the USA they even manage to move businesses to states that have no sales tax to take advantage of that and that is in the same country.

Personally I think it is a ridiculous idea rooted in the ravings of people who think it will solve some kind of problem and that if we can but extract all the tax the government is "owed" then we will live in a land of milk and honey and want for nothing. Which is of course BLX.

Apple is domiciled here, and they have no branches here, yet we pay GST

Tax is not a profit stream, its an income stream to run this country

Geektastic

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#1528202 8-Apr-2016 10:18

tdgeek:

Geektastic:

I can see that there may be methods to charge us tax.

I still don't think the NZ government has any ability in law to tax and enforce against companies domiciled in other places that have no physical base in NZ at all. Heck, in the USA they even manage to move businesses to states that have no sales tax to take advantage of that and that is in the same country.

Personally I think it is a ridiculous idea rooted in the ravings of people who think it will solve some kind of problem and that if we can but extract all the tax the government is "owed" then we will live in a land of milk and honey and want for nothing. Which is of course BLX.

Apple is domiciled here, and they have no branches here, yet we pay GST

Tax is not a profit stream, its an income stream to run this country

I disagree. Tax is a profit stream in so far as the company collecting/earning it (NZ government) has a duty to manage costs BEFORE simply squeezing all and sundry for more of their money so it can waste it. On principle, governments owe those funding them a 100% no inefficiency, no wastage method of operation before they can justify getting more of our money.

This modern misunderstanding that we 'owe' the government as some sort of right needs rebalancing: we choose to allow the government to take our money provided that they meet certain criteria, a point that these days seems to be oft forgotten.

NonprayingMantis

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#1528204 8-Apr-2016 10:21

tdgeek:

Geektastic:

I can see that there may be methods to charge us tax.

I still don't think the NZ government has any ability in law to tax and enforce against companies domiciled in other places that have no physical base in NZ at all. Heck, in the USA they even manage to move businesses to states that have no sales tax to take advantage of that and that is in the same country.

Personally I think it is a ridiculous idea rooted in the ravings of people who think it will solve some kind of problem and that if we can but extract all the tax the government is "owed" then we will live in a land of milk and honey and want for nothing. Which is of course BLX.

Apple is domiciled here, and they have no branches here, yet we pay GST

Tax is not a profit stream, its an income stream to run this country

We pay GST on physical Apple products here - ipad, Macbook, iPhone etc

We do not pay GST on digital purchases from Apple (iTunes songs, Apps, in-app purchases, iCloud fees)

Jas777

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#1528215 8-Apr-2016 10:33

Anyone who thinks all Western Countries are not going to do this are dreaming.

The money to pay for the services provided needs to be collected.

But we could move to a USER PAYS system and have less tax.

Geektastic

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#1528308 8-Apr-2016 11:45

Jas777:

Anyone who thinks all Western Countries are not going to do this are dreaming.

The money to pay for the services provided needs to be collected.

But we could move to a USER PAYS system and have less tax.

Or the services need to be reduced.

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#1528313 8-Apr-2016 11:51

Hmm, how exactly will this be enforced? Say I sign up to US Nutlix via VPN. How will either party know to charge me GST? Will this require the IRD to boot down my door in the middle of a Daredevil marathon and hand me a bill?

evnafets

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#1528390 8-Apr-2016 12:46

If you sign up to US version, I don't think there is a way that you could enforce it.

However there should be no question about the NZ version of netflix - it should attract GST.

They are providing a service in NZ, to NZers. There was a specific point they started doing that, and specific content provided (or not provided as the case may be)

To me it is hypocritical to say "You are in NZ for purposes of accessing content, but in US for tax purposes so we don't have to pay GST"

Fred99

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#1528428 8-Apr-2016 13:30

Lias:

roobarb:

The taxman doesn't give two hoots about the internet, it's a financial transaction that skimmed.

Then why are they so reluctant to introduce a financial transaction tax system? Oh wait, that would tax the rich, can't be having that :-P

I suspect that the real reason it's not seriously considered is that despite it seeming to solve problems with avoidance, exceptions would need to be made which would just open a whole lot of new opportunities for avoidance - so it will end up being just as complex and potentially unfair as the present system - or perhaps worse.

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