Duty taxes (GST) on products bought overseas

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Forums › Finance and wealth management › Duty taxes (GST) on products bought overseas

Sanco

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#191204 27-Jan-2016 16:19

Not sure this has been discussed already (could not find anything relevant) so I want to take the pulse of our community on this, quite interesting, topic.

So, the Government has decided to listen to the retailers bemoans of an unfair playing field and will now charge us GST on what we buy overseas.

I can understand the fact that the Government needs to collect revenue to support our critical services and the people on the benefit, but what appals me is that they decided to charge GST on gifts received from overseas when these are over the value of $110.00.

So now, instead of questioning our retailers why we pay more than most of the world, sometimes double or more, for products here they have added a GST on our purchases overseas. Surely 15% does not make goods twice as expensive.

My thoughts are on whether it is even legal to apply a GST on a present, which is personal stuff.

Question: Will they apply GST on goods bought duty free if they're over $60?

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#1479976 27-Jan-2016 16:25

Doesn't the change only apply to online services? Isn't there still a theshold for physical goods

nathan

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#1479988 27-Jan-2016 16:32

yes of course its legal to charge GST on a "present"

$110 threshold seems insanely low to me

timmmay

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#1479990 27-Jan-2016 16:33

They've always charged GST on overseas purchases when they're sent to the country. Have they announced some lower threshold or new type of import they're targeting? If so please link to details.

jmh

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#1479994 27-Jan-2016 16:37

Retail businesses really need to up their game. NZ is the ideal place for an online business to be competitive. With a retail outlet you may not get much foot traffic, and have retail space to pay for and staffing. With an online business you can market nationally and maybe even internationally, with lower warehousing and staffing costs. With higher sales bulk discounts are possible. And yet, I rarely see a good online business in this country. Most charge the same price as retail outlets, removing any possible benefit of shopping online. In fact often the online business is just propping up a traditional retail operation.

I wonder whether one of the problems is the preponderance of franchising in NZ retail. The online business would eat into individual franchise operations and undermine the business model that is so profitable for the franchise holder.

Adding 15% to overseas won't rescue the retail sector. I regularly shop in the UK with 20% sales tax and it's still cheaper.

afe66

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#1480003 27-Jan-2016 16:45

mmm I the uk they charge VAT on presents 40 pounds or more and duty too if more than 135

sbiddle

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#1480016 27-Jan-2016 16:53

Sanco:

So, the Government has decided to listen to the retailers bemoans of an unfair playing field and will now charge us GST on what we buy overseas.

I can understand the fact that the Government needs to collect revenue to support our critical services and the people on the benefit, but what appals me is that they decided to charge GST on gifts received from overseas when these are over the value of $110.00.

So now, instead of questioning our retailers why we pay more than most of the world, sometimes double or more, for products here they have added a GST on our purchases overseas. Surely 15% does not make goods twice as expensive.

My thoughts are on whether it is even legal to apply a GST on a present, which is personal stuff.

Question: Will they apply GST on goods bought duty free if they're over $60?

GST (and duty where the product has one) have ALWAYS applied to EVERY purchase from overseas. If the value to be collected is under $60 then this is simply waived due to the costs of collecting the GST not stacking up.

If you've been charged on a $110 item it's probably because the product is eligible for duty AND GST, which have no exemption.

All of this and a calculator are explained very clearly on the whatmyduty website.

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Geektastic

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#1480018 27-Jan-2016 16:56

As a cross-reference to the thread about spelling...the NZ Customs pamphlet about GST has a list of prohibited imports, including "bayonet's"...!

mattwnz

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#1480019 27-Jan-2016 16:56

What's the item? Maybe it has a big percentage of duty on it?

Geektastic

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#1480020 27-Jan-2016 16:57

jmh:

Retail businesses really need to up their game. NZ is the ideal place for an online business to be competitive. With a retail outlet you may not get much foot traffic, and have retail space to pay for and staffing. With an online business you can market nationally and maybe even internationally, with lower warehousing and staffing costs. With higher sales bulk discounts are possible. And yet, I rarely see a good online business in this country. Most charge the same price as retail outlets, removing any possible benefit of shopping online. In fact often the online business is just propping up a traditional retail operation.

I wonder whether one of the problems is the preponderance of franchising in NZ retail. The online business would eat into individual franchise operations and undermine the business model that is so profitable for the franchise holder.

Adding 15% to overseas won't rescue the retail sector. I regularly shop in the UK with 20% sales tax and it's still cheaper.

Also you should not be paying that 20% if the goods are being exported from the EU...!

Geektastic

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#1480021 27-Jan-2016 16:59

mattwnz:

What's the item? Maybe it has a big percentage of duty on it?

Ah yes. Duty.

Anyone care to offer an explanation as to why every item of clothing and pair of shoes imported to NZ (i.e. almost all of them) has a somewhat random 10% Customs Duty in addition to GST?

jmh

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#1480022 27-Jan-2016 17:00

Geektastic:

jmh:

Retail businesses really need to up their game. NZ is the ideal place for an online business to be competitive. With a retail outlet you may not get much foot traffic, and have retail space to pay for and staffing. With an online business you can market nationally and maybe even internationally, with lower warehousing and staffing costs. With higher sales bulk discounts are possible. And yet, I rarely see a good online business in this country. Most charge the same price as retail outlets, removing any possible benefit of shopping online. In fact often the online business is just propping up a traditional retail operation.

I wonder whether one of the problems is the preponderance of franchising in NZ retail. The online business would eat into individual franchise operations and undermine the business model that is so profitable for the franchise holder.

Adding 15% to overseas won't rescue the retail sector. I regularly shop in the UK with 20% sales tax and it's still cheaper.

Also you should not be paying that 20% if the goods are being exported from the EU...!

I know. I meant, when I am over there which is reasonably often.

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sbiddle

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#1480029 27-Jan-2016 17:08

Geektastic:

mattwnz:

What's the item? Maybe it has a big percentage of duty on it?

Ah yes. Duty.

Anyone care to offer an explanation as to why every item of clothing and pair of shoes imported to NZ (i.e. almost all of them) has a somewhat random 10% Customs Duty in addition to GST?

Because clothing and shoes are both manufactured in NZ.

JimmyH

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#1480219 27-Jan-2016 19:51

Geektastic:

Ah yes. Duty.

Anyone care to offer an explanation as to why every item of clothing and pair of shoes imported to NZ (i.e. almost all of them) has a somewhat random 10% Customs Duty in addition to GST?

Political lobbying by whiny manufacturers with broken business models, who can't compete without being coddled and protected from faving to compete.

Thankfully, most duty has been removed, and the rest is slowly going too.

Sanco

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#1480223 27-Jan-2016 20:03

sbiddle:

GST (and duty where the product has one) have ALWAYS applied to EVERY purchase from overseas. If the value to be collected is under $60 then this is simply waived due to the costs of collecting the GST not stacking up.

If you've been charged on a $110 item it's probably because the product is eligible for duty AND GST, which have no exemption.

All of this and a calculator are explained very clearly on the whatmyduty website.

That post is helpful.

The threshold has ALWAYS been $400 and presents were NEVER taxed, buddy.

I am mentioning the new law that taxes anything worth more than $60 and now even gifts/presents worth more than $110.

I have had a gift for Xmas sent by my mum in Italy (a coffee machine) and I had to pay GST and duties on it. You think that's fair, good. I don't.

sbiddle

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#1480229 27-Jan-2016 20:26

Sanco:

sbiddle:

GST (and duty where the product has one) have ALWAYS applied to EVERY purchase from overseas. If the value to be collected is under $60 then this is simply waived due to the costs of collecting the GST not stacking up.

If you've been charged on a $110 item it's probably because the product is eligible for duty AND GST, which have no exemption.

All of this and a calculator are explained very clearly on the whatmyduty website.

That post is helpful.

The threshold has ALWAYS been $400 and presents were NEVER taxed, buddy.

I am mentioning the new law that taxes anything worth more than $60 and now even gifts/presents worth more than $110.

I have had a gift for Xmas sent by my mum in Italy (a coffee machine) and I had to pay GST and duties on it. You think that's fair, good. I don't.

I don't make the rules, and the rules haven't changed any time lately. I do however import a lot of products myself and my employer does as well so have a pretty good idea of what you'll get away with.

The threshold has never been $400 - the threshold is based on the GST and/or duty component which is $60. This means you can normally import goods that are only subject to GST up to a value of $400 incl freight/postage before you'll have to pay GST. If the product is liable for GST and duty you'll have to pay along with the EITF regardless of the value of the goods, which is exactly why you can have a parcel at say $200 for example that will be subject to charges.

I never said it's not fair, I simply quoted the rules. If you're think the rules are unfair, you should approach Customs or your local MP about them.

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