GST to be charged on purchases below $400

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#2006244 1-May-2018 20:22

tdgeek:

How about this? GST is a consumption tax. What about a tax on bank transactions? If you get money into your bank, i.e. salary, its not tax as is the case now. If you transfer finds to savings, its not taxed as is the case now. If you save, no tax, same as now. If you spend its taxed. The end goal is same revenue but much less admin.

Would probably make people not want to deal with banks, and possibly buy and sell in things like bitcoin. Also wouldn't that mean that all house sales would be taxed? So that would make house prices even higher.

I don't think the current system is that broken, but we do still seem to have a lot of cash jobs occurring. I fully believe in everyone, including foreign owned companies, paying their fair share of tax, as it means less reliance on charities.

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#2006246 1-May-2018 20:26

Everything I buy from now on online and from overseas I will simply state it is a gift for myself and therefore it does not have to be taxable because it is a gift.

rayonline

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#2006249 1-May-2018 20:31

nurcopolics: Everything I buy from now on online and from overseas I will simply state it is a gift for myself and therefore it does not have to be taxable because it is a gift.

Customs don't care.
Amazon etc would still charge tax. If you bought something from Harvey Norman do you still pay gst for gifts?

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#2006259 1-May-2018 20:45

Will freight forwarders such as YouShop have to collect GST?

[Edit] Based on tzoi's post it looks like the answer is yes, so that closes that loophole.

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#2006262 1-May-2018 20:51

nurcopolics: Everything I buy from now on online and from overseas I will simply state it is a gift for myself and therefore it does not have to be taxable because it is a gift.

I can assume based on that you have no idea what marking something as gift entails.

Hint: It does not mean it's free of taxes, and if it's above $110 you'll be paying tax because that's the gift threshold. Multiple parcels to the same address marked as a gift will also be flagged.

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#2006291 1-May-2018 21:41

If they can make the system relatively painless to comply with, and also raise sufficient revenue in relation to the cost of collecting it, then it's probably the right move. I have to concede that.

However, if NZ retailers think that somehow it will save them and let them remain in their safe cozy little pre-internet world - where they could turn a handsome profit by being an exclusive supplier with bloated markups, a small product range, poor service, endless delays in products reaching our market and inflated cost structures then they are dreaming.

I shed not a tear for them. They gouged me too rapaciously for too long.

I have saved a lot of money by buying online, and I expect that imposing GST will have little to no impact on where I buy going forward.When I buy online to save money, I usually save a lot. NZ retailers aren't just 15% dearer than the international price, often they are 300-400% dearer, and 15% GST won't erase that. Also, I often buy offshore not because it's cheaper, but because NZ retailers don't even carry the product I want: bulk 50GB optical disks, nVidia Shield TV units, niche electronics. It literally isn't feasible to shop here for many of these, even if I wanted to.

Plus, once there is no GST advantage to being offshore, hopefully Amazon and/or Aliexpress etc might set up a local fulfillment center to slash shipping costs and times. NZ retailers should be careful what they wish for, they just might get it.

It would almost be worth paying the GST, just to stop the bleating of NZ retailers, although doubtless they will find something else to whine about. They need to adapt or die. And I don't really care which option they choose.

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#2006300 1-May-2018 22:13

nurcopolics: Everything I buy from now on online and from overseas I will simply state it is a gift for myself and therefore it does not have to be taxable because it is a gift.

Tax evasion in other words

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#2006302 1-May-2018 22:17

The bit that confuses me is this idea that overseas companies outside our jurisdiction can be “required” to do anything at all....

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#2006303 1-May-2018 22:17

Coil:

I thought that Labour was not adding any further taxes along with a whole raft of other broken election promises lol.

Seems that only retails in partnership with customs or what ever will be charging this and I saw it quoted that the likes of a $40 book they won't bother because its costs more to collect on it than they make.

Revenue gathering through and throughout.

GST at 15% is an existing tax and remains unchanged.

Hardly a new tax.

I think the legal position is you're supposed to pay the GST yourself.....and you haven't been. The "exemption" has been a failure to collect combined with a failure to comply.

Goods and Services Tax (GST)

GST of 15% applies to all imported items, including anything you bought online or using a mail order catalogue. (emphasis added)

We calculate GST based on the total of:

how much you paid for the item, plus
any international transport and insurance costs, plus
any import duty.

We do not collect any duties or GST where the total amount (duties + GST) for your package/shipment is less than NZ$60. This doesn’t apply to alcohol or tobacco.

Note: For duty and GST calculations, if you import multiple orders in a short time period from the same supplier and address, we consider them to be a single shipment.

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Linuxluver

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#2006304 1-May-2018 22:22

sbiddle:

nurcopolics: Everything I buy from now on online and from overseas I will simply state it is a gift for myself and therefore it does not have to be taxable because it is a gift.

I can assume based on that you have no idea what marking something as gift entails.

Hint: It does not mean it's free of taxes, and if it's above $110 you'll be paying tax because that's the gift threshold. Multiple parcels to the same address marked as a gift will also be flagged.

Plus.....lying on a customs document might be a crime....

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#2006325 1-May-2018 23:59

nurcopolics: Everything I buy from now on online and from overseas I will simply state it is a gift for myself and therefore it does not have to be taxable because it is a gift.

Doesn't really work, given the gift threshold (total value, not GST+Duty amount) is only $110, basically a saving of essentially nothing.

Geektastic: The bit that confuses me is this idea that overseas companies outside our jurisdiction can be “required” to do anything at all....

Your beloved UK has done this with VAT for decades. The expectation is that if you deliberately sell to a country, you have to abide by that country's laws of commerce. Naturally, the exception is the US where companies have the full backing of the US government to ignore the foreign governments as Americans have a bit of a complex regarding that. Of course if all else fails, just yoink any money being paid to the foreign company - issue a directive to the banks or payment processors for example.

rugrat: They expect 75% compliance.
Wonder how they’ll enforce other 25%

Australia is off the bat first be interesting.

For example, if they don't play ball the Australian government could grab any payments from Australian firms that owe the foreign company money – or try taking them through the courts in their home country.

That go down well intercepting a payment from another party and making them under pay a debt.

https://i.stuff.co.nz/business/industries/103516025/amazon-tax-what-it-means-for-online-shopping

The Australian Taxation Office already has that power to seize domestic payments. Essentially they take the money to satisfy a debt to the taxation office, and the original debt is expected to be treated as satisfied (essentially the ATO's reasoning is that the recipient business that was underpaid is in the same position as if the payment was made and the original tax debt paid as soon as it was received).

I'm not sure if the IRD also has this power, but if not I wouldn't be surprised if the New Zealand government gave it to them.

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#2006337 2-May-2018 01:11

If the taxation department starts seizing payments to overseas companies, won’t those companies then turn around to firms and just say payment must be received in full before they send the goods.
I.e nothing sent on credit.

If they start trying to prosecute companies in their home land, and 25% of companies don’t comply I wonder how much that’ll cog up the court systems.
Plus I still don’t get how they will know how much business a company is doing. A lot of parcels I receive have a lot less written on them, then what I paid for value written on outside. Guessing it’s what the company would want in insurance if parcel lost.

Also what happens if exchange rate changes between company collecting money and paying?

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#2006353 2-May-2018 07:12

rugrat: A lot of parcels I receive have a lot less written on them, then what I paid for value written on outside. Guessing it’s what the company would want in insurance if parcel lost.

I hope you are aware of the risks of this if it's a regular thing. Many people globally will try and convince sellers to falsify the customs declaration to avoid paying local duties, and many things ex China will be like this without even asking. The problem is if Customs decide to inspect the package and decide on their own value, it's you as the buyer who will be liable for the falsification, not the seller. You will need to pay GST and/or duty on what they deem the value to be.

Without saying too much slip it's safe to say a lot of people have no idea at all what goes of in regards to package processing, inspection and monitoring of good and addresses that goes on. It's probably why so many people get busted importing restricted drugs from overseas - they think the postal process is as close to anonymous as you can get, but the reality is that it's far from it.

rugrat

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#2006362 2-May-2018 07:40

I can’t control what the seller puts on the parcel, and didn’t ask.
I’ve brought from a number of places, and it seems to be common practice.
The items including postage are under NZ$400, I do small orders at a time to keep below $400.

Just if they use this to work out if a company is doing $60000 worth of business.

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#2006365 2-May-2018 07:47

rugrat: I can’t control what the seller puts on the parcel, and didn’t ask.
I’ve brought from a number of places, and it seems to be common practice.
The items including postage are under NZ$400, I do small orders at a time to keep below $400.

Just if they use this to work out if a company is doing $60000 worth of business.

Sure - you can't control what the seller puts on the parcel, but if they are declaring false values to avoid GST and/or duty it's you who is liable for this, not the seller. Customs will assess the value of the goods and send you the bill.

Lots of small orders to the same address under $400 will attract the attention of customs - especially if they're arriving at the same time.

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