Multiple Packages to Avoid GST?

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Ultimate Geek
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#941865 27-Nov-2013 17:51

I bought a new PVR from a French retailer about 6 months ago. Total including shipping came to around 350 Euro (approx NZ$700 at the time). Was expecting to get hit with GST but to my surprise it turned up a week later... nothing from customs at all!

Guess I got lucky and it slipped through.

TwoSeven

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#941901 27-Nov-2013 20:39

Worth while noting that its the landed price not the purchase price that the $400 limit applies to.

I haven't really found much of a difference in overseas pricing on computer components. Biggest issue I have is lack of availability of products and retailers not listing the product code (or the last few digits) so one can see which version of the product they are selling.

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sleemanj

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#941918 27-Nov-2013 21:38

timmmay: I sent two packages a few days apart a few years back, SSDs, they combined them and charged me GST. Not sure why I bothered, given I claim GST back anyway on my business.

Being GST reg too I wouldn't mind paying the GST on imports in the slightest, but there are two reasons for trying hard to avoid the limit even for we GST registered peoples:

1. The hassle.
2. The IETF and MPI Fees which combined are currently are about $40.77+GST, added to every import that breaks the threshold

The hassle and delay involved alone is a real incentive for avoiding the threshold - this could be solvable though fairly trivially for small packages, you should be able to pre-register tracking numbers at customs and pre-pay, declare the contents, even upload an invoice, then when a package comes in it deducts the amount and on it's way it goes they would have all the information they want right there, easy as.

But it's the IETF/MPI Fees that really bugs me, as an example consider an import totalling $399, that's under the threshold so $399 excluding GST is our landed cost. Now consider a $400 import, just $1 difference, but because the threshold is broken customs adds that IETF/MPI fee and now our landed cost is $440.77 excluding GST, an additional 10% increase in the GST exclusive landed cost, just for a difference of $1.

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bazzer

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#942729 29-Nov-2013 10:23

Does any of this constitute tax avoidance I wonder?

dusty42

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#942756 29-Nov-2013 10:36

JimmyH: My experience is that, as well as the cost saving which can be substantial, good overseas retailers sometimes tend to beat the NZ ones on service and speed as well - even allowing for shipping.

There was a (fairly rare) electronic part I wanted a while ago. From memory the sole NZ authorised seller wanted $NZ 699 for it, with a four week delivery time. Monoprice supplied it in under a week, at $US128. Even if it fails, and I buy another one from them, and it fails and I buy another one, I would still be ahead!

Yeah, that's my experience.

Exotic components can be 4-10 times the price via the local distributor, making it cheaper to get it from Newark.com and pay through the nose for freight forwarding. No warranty, but you keep possession of all your arms and legs.

nathan

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#942759 29-Nov-2013 10:41

bazzer: Does any of this constitute tax avoidance I wonder?

is that a rhetorical question?

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geek4me

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#942783 29-Nov-2013 10:52

I bought an MK802 II Android 4.0 Mini PC on Ebay from a Chinese company. It was faulty so I returned it ($15 postage) for a replacement. The replacement was also faulty so I returned that ($15 postage) too. The Chinese company said the second returned item never arrived so did not refund the purchase price. I suspect because I gave negative feedback they denied that they had received the returned item. This is the sort of issue you face when buying from overseas. Avoiding GST by buying from overseas has its drawbacks.

bazzer

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#942786 29-Nov-2013 10:53

nathan:
bazzer: Does any of this constitute tax avoidance I wonder?

is that a rhetorical question?

Not really, but sort of, I guess. I don't consider buying something overseas that costs under $400 and hence "avoiding" the GST to be tax avoidance but once you start talking about splitting shipments and sending items to different people it crosses the line, right?

stevenz

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#942796 29-Nov-2013 10:59

Given that most tax avoidance is by large companies who "hide" income, I don't feel particularly guilty about a avoiding few bucks of GST if I can do so without blatantly breaking laws.

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timmmay

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#942808 29-Nov-2013 11:08

geek4me: I bought an MK802 II Android 4.0 Mini PC on Ebay from a Chinese company. It was faulty so I returned it ($15 postage) for a replacement. The replacement was also faulty so I returned that ($15 postage) too. The Chinese company said the second returned item never arrived so did not refund the purchase price. I suspect because I gave negative feedback they denied that they had received the returned item. This is the sort of issue you face when buying from overseas. Avoiding GST by buying from overseas has its drawbacks.

Claim it back from NZ Post.

geek4me

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#942959 29-Nov-2013 15:40

timmmay:
geek4me: I bought an MK802 II Android 4.0 Mini PC on Ebay from a Chinese company. It was faulty so I returned it ($15 postage) for a replacement. The replacement was also faulty so I returned that ($15 postage) too. The Chinese company said the second returned item never arrived so did not refund the purchase price. I suspect because I gave negative feedback they denied that they had received the returned item. This is the sort of issue you face when buying from overseas. Avoiding GST by buying from overseas has its drawbacks.

Claim it back from NZ Post.

I would if I only I could find the receipt that I think got thrown out in a clean up at home. The amount lost was not large, however the experience has put me off buying from overseas and particularly from China. Saving some GST is not worth the bother when you could by a lemon as I did.

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afe66

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#943006 29-Nov-2013 17:31

Only a matter of time, til they scan the address of each parcel since I imagine that someone looks at each parcel to see what they declared value is. (Only scan those under $400)

Then they start pinging people once the total value of products being imported in a tax year hits $400.

A.

PS While probably not legaly tax evasion, its in the spirit of tax evasion.

PPS ? Ask the big shippers for addresses of all the packages they are bringing in . ie Fedex etc will know the declared value of all the items in a consignment for insurance perposes each with a unique bar code

jpoc

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#943143 29-Nov-2013 20:41

afe66: Only a matter of time, til they scan the address of each parcel since I imagine that someone looks at each parcel to see what they declared value is. (Only scan those under $400)

Then they start pinging people once the total value of products being imported in a tax year hits $400.

A.

PS While probably not legaly tax evasion, its in the spirit of tax evasion.

PPS ? Ask the big shippers for addresses of all the packages they are bringing in . ie Fedex etc will know the declared value of all the items in a consignment for insurance perposes each with a unique bar code

Disagree. It is avoidance - doing things in a way that avoids a legal tax liability that the people who wrote the laws thought that you should pay.

You might say that it is within the letter of the law but outside the spirit.

Evasion is an act of concealing the truth and would be more like producing a false invoice to say that your new DSLR is worth only $300. Avoidance would be more like buying the body and lens in two goes for an accurately declared true price of $350 each.

afe66

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#943349 30-Nov-2013 11:38

Fair enough, in hindsight I meant to say avoidance.

My main point was meant to be that while it isnt illegal its against the spirit of the law.

A.

BTR

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#943890 2-Dec-2013 08:12

Purchase the goods from different suppliers and you should be OK.

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