Kiwis to be hit with tax on online purchases

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Forums › Finance and wealth management › Kiwis to be hit with tax on online purchases

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#1902502 16-Nov-2017 07:01

attewell:

KrazyKid:

And what if Ali express outright said no, we won't collect this tax. What could the government do? It's not like they can make a Chinese company do anything.

The Govt could stop all aliexpress items.. and start charging a $50 fee.. per parcel.. that would soon get aliexpress paying the GST i their goods were not getting through the border to customers..

no it wouldnt , it would stop Ali express sending parcels to NZ and they wouldnt even worry about it .

Common sense is not as common as you think.

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#1902504 16-Nov-2017 07:20

vexxxboy:

attewell:

KrazyKid:

And what if Ali express outright said no, we won't collect this tax. What could the government do? It's not like they can make a Chinese company do anything.

The Govt could stop all aliexpress items.. and start charging a $50 fee.. per parcel.. that would soon get aliexpress paying the GST i their goods were not getting through the border to customers..

no it wouldnt , it would stop Ali express sending parcels to NZ and they wouldnt even worry about it .

Yes that's what most sellers had been doing to Russia, but I think they have managed to set up a base in Russia somehow?

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#1902505 16-Nov-2017 07:21

BlinkyBill: Morally, what’s the difference between a multi-national using foreign jurisdictions to avoid income tax, and consumers purchasing overseas to avoid consumption tax?

No difference?

BUT, no one so far says they willl purchase overseas to avoid the tax, several have said they are fine with the tax but will still purchase overseas as it will STILL be orders of magnitude cheaper than NZ stores feel is appropriate?

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#1902507 16-Nov-2017 07:28

BlinkyBill: Morally, what’s the difference between a multi-national using foreign jurisdictions to avoid income tax, and consumers purchasing overseas to avoid consumption tax?

Nothing, and I don't have a problem with paying the taxes as long as I don't have to go out of my way to do it. It's just that using 'protecting our local retailers!' as a reason to collect GST is completely disingenuous. I wasn't kidding when I said I bought a bunch of phone cases for $2-$3 each for my daughter on Ali Express. Even a boring clear plastic one goes for at least $9 here. GST is definitely not going to 'level the playing field'.

Personally I'd prefer if they just said 'You're not paying tax that you should, and we're going to collect it if we can.'

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#1902512 16-Nov-2017 07:48

BlinkyBill: Morally, what’s the difference between a multi-national using foreign jurisdictions to avoid income tax, and consumers purchasing overseas to avoid consumption tax?

No difference.

What about locals buying from local online and physical stores that are not owned locally- yes they may pay gst but the other 90% goes out of the country.

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#1902517 16-Nov-2017 08:26

I cant see the issue charging GST. If I bought a spade from Bunnings I pay GST. If I bought a spade from www.spade.com I should pay GST. Doesnt matter who imports it whether its Bunnings or me. Im unsure how compliant an online retailer needs to be, can they be forced to add GST? Or we find some other way to collect it. The banking system would seem an easier way. If NZ's retail sales market slowly drifts offshore, as it is, thats a loss of revenue to the Govt.

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#1902525 16-Nov-2017 08:57

Batman:
BlinkyBill: Morally, what’s the difference between a multi-national using foreign jurisdictions to avoid income tax, and consumers purchasing overseas to avoid consumption tax?

No difference.

What about locals buying from local online and physical stores that are not owned locally- yes they may pay gst but the other 90% goes out of the country.

Huh??

All those brick and mortar stores employ people, pay rent, pay insurances and other outgoings, which means that the money spent there goes round and round in the local economy. Nothing like buying from an overseas online store.

I support the Government trying to collect the GST on overseas purchases, I just hope that they can work out a way to do it that doesn't cost them more than the revenue they will earn from it. Wait and see how it works in Australia, and copy their system (make retailers that sell more than $60,000 - the current threshold for GST registration here - register for GST and collect it). If it is paid at point of purchase, there should be no need for the IETF/Biosecurity fees at the border.

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#1902532 16-Nov-2017 09:12

vexxxboy:

Batman:

Finch:

Any idea when this will come into force? By the end of the year or next year sometime?

Do I need to rush to buy things online for Xmas now or no? :)

Apparently the quote was that they are definitely doing this.

And then a few hours later they're only looking at doing it.

because there was a reason it was $400 and over because anything under that was going to cost more to collect than it would raise. The last government knew this which is why they hadn't done anything.

... just like the last government 'knew' that it was impossible to restrict foreign non-resident home buyers without compromising TPPA which is why they hadn't done anything.

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#1902537 16-Nov-2017 09:19

BlinkyBill: Morally, what’s the difference between a multi-national using foreign jurisdictions to avoid income tax, and consumers purchasing overseas to avoid consumption tax?

A lot.

People aren't purchasing overseas to avoid paying a consumption tax. They're purchasing overseas and both customs and IRD are not collecting the comsumption tax below a current de minimis amount because they deem the costs of collecting it for goods below this amount may be so high that it's not financially viable to collect it.

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#1902538 16-Nov-2017 09:19

tdgeek:

I cant see the issue charging GST. If I bought a spade from Bunnings I pay GST. If I bought a spade from www.spade.com I should pay GST. Doesnt matter who imports it whether its Bunnings or me. Im unsure how compliant an online retailer needs to be, can they be forced to add GST? Or we find some other way to collect it. The banking system would seem an easier way. If NZ's retail sales market slowly drifts offshore, as it is, thats a loss of revenue to the Govt.

E X A C T L Y 100% this.

How it gets implemented will be "interesting".

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#1902565 16-Nov-2017 09:30

trig42:

I support the Government trying to collect the GST on overseas purchases, I just hope that they can work out a way to do it that doesn't cost them more than the revenue they will earn from it. Wait and see how it works in Australia, and copy their system (make retailers that sell more than $60,000 - the current threshold for GST registration here - register for GST and collect it). If it is paid at point of purchase, there should be no need for the IETF/Biosecurity fees at the border.

MPI biosecurity costs should still need to be paid regardless of where the GST is collected. MPI works on a cost recovery basis, so if you're importing goods you should contribute to inspection fees.

How is it fair that goods from an Australian retailer who collects GST are treated differently to somebody who imports goods and has to pay GST and MPI costs at the border? Your goods still have to be screened at the border.

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#1902567 16-Nov-2017 09:30

Maybe it won't as fast as Revenue Minister Stuart Nash thinks. Finance Minister Grant Robertson backpedals on 'ambitious' Stuart Nash over GST

Regards,

Old3eyes

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#1902569 16-Nov-2017 09:32

robjg63:

tdgeek:

I cant see the issue charging GST. If I bought a spade from Bunnings I pay GST. If I bought a spade from www.spade.com I should pay GST. Doesnt matter who imports it whether its Bunnings or me. Im unsure how compliant an online retailer needs to be, can they be forced to add GST? Or we find some other way to collect it. The banking system would seem an easier way. If NZ's retail sales market slowly drifts offshore, as it is, thats a loss of revenue to the Govt.

E X A C T L Y 100% this.

How it gets implemented will be "interesting".

Forcing the banking system to collect the payments is a logistical nightmare with no realistic way it can be done.

How do you invisage this could be collected by banks?

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#1902576 16-Nov-2017 09:39

Slightly off topic...

How much gst is Govt missing out on for cash goods and services and bartered goods?

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#1902599 16-Nov-2017 09:49

sbiddle:

robjg63:

tdgeek:

I cant see the issue charging GST. If I bought a spade from Bunnings I pay GST. If I bought a spade from www.spade.com I should pay GST. Doesnt matter who imports it whether its Bunnings or me. Im unsure how compliant an online retailer needs to be, can they be forced to add GST? Or we find some other way to collect it. The banking system would seem an easier way. If NZ's retail sales market slowly drifts offshore, as it is, thats a loss of revenue to the Govt.

E X A C T L Y 100% this.

How it gets implemented will be "interesting".

Forcing the banking system to collect the payments is a logistical nightmare with no realistic way it can be done.

How do you invisage this could be collected by banks?

My suggestion was that there is no way that we can have all offshore retailers being GST registered or forcing them to add GST to their foreign invoice and send the funds to the IRD. The banking system is one system that is intermediary, hence it will be common to almost everyone. if there was a way to tag NZ payments to offshore as for importing goods, to bill GST by the NZ paying bank. Just an idea. At least that is ONE system, whereas we cant get every overseas retailer to collect GST and send it to the IRD. On the surface it seems relatively clean

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