GST to be charged on purchases below $400

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Awrrr
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#2055708 13-Jul-2018 13:12

I freely admit I know nothing about this whatsoever, so here is my opinion: Why not get rid of GST altogether? It is a crappy tax that hits the poorest the hardest and most people probably resent paying it. Replace it with a financial transaction tax. Few if any overseas purchases are done in cash. Illegal drugs, maybe, but they don't pay tax anyway. So just slap an automatic tax on any electronic payment, credit card, debit card, whatever, wherever. Problem solved?

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afe66

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#2055710 13-Jul-2018 13:15

Rikkitic:

I freely admit I know nothing about this whatsoever, so here is my opinion: Why not get rid of GST altogether? It is a crappy tax that hits the poorest the hardest and most people probably resent paying it. Replace it with a financial transaction tax. Few if any overseas purchases are done in cash. Illegal drugs, maybe, but they don't pay tax anyway. So just slap an automatic tax on any electronic payment, credit card, debit card, whatever, wherever. Problem solved?

And watch everyone change to cash society and pay not gst or income tax...

SirHumphreyAppleby

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#2055715 13-Jul-2018 13:25

tdgeek:

GST returns are two totals. GST Collected and GST Paid as per the Balance Sheet. NZ businesses do it, Netflix does it, Apple does it. It is a simple change to a Billing system, its two codes for two Balance Sheet items. It just seems that the real issue is we dont want to pay more for overseas purchases. Money, the a same old issue. And as quoted somewhere recently here its another Govt tax, so its a tax fetish, or I dont want to pay any more tax. Get the Govt to reduce tax across the board, they can do that and reduce expenditure as well, everyone is happy. I just cannot see the issue when I get charged GST on an ice cream but not on Chinese socks

Your argument is only valid if everyone plays nice, which they won't.

What happens when the receiving country decides you haven't paid enough tax? Perhaps they are accounting differently, using daily exchange rates of monthly median rates, or a completely different source of rates?

What happens when a TPLAC decides they want to charge 1000% tax? If we say sure, we'll make our residents pay taxes imposed by any other nation, then there is nothing we can do to stop it, our courts would have to allow it.

The whole idea is crazy, and driven out of greed and waste, not common sense.

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#2055718 13-Jul-2018 13:32

SirHumphreyAppleby:

tdgeek:

GST returns are two totals. GST Collected and GST Paid as per the Balance Sheet. NZ businesses do it, Netflix does it, Apple does it. It is a simple change to a Billing system, its two codes for two Balance Sheet items. It just seems that the real issue is we dont want to pay more for overseas purchases. Money, the a same old issue. And as quoted somewhere recently here its another Govt tax, so its a tax fetish, or I dont want to pay any more tax. Get the Govt to reduce tax across the board, they can do that and reduce expenditure as well, everyone is happy. I just cannot see the issue when I get charged GST on an ice cream but not on Chinese socks

Your argument is only valid if everyone plays nice, which they won't.

What happens when the receiving country decides you haven't paid enough tax? Perhaps they are accounting differently, using daily exchange rates of monthly median rates, or a completely different source of rates?

What happens when a TPLAC decides they want to charge 1000% tax? If we say sure, we'll make our residents pay taxes imposed by any other nation, then there is nothing we can do to stop it, our courts would have to allow it.

The whole idea is crazy, and driven out of greed and waste, not common sense.

This is about Amazon type taxes. Give an example of a hypothetical tax that a TPLAC might charge that we would have to charge NZ residents. I think you're grasping. Where does GST fit in as regards greed and waste? Whats a common sense approach to recive the GST that the Statute provides for, that we dont yet recieve from millions of small individual imports? Its your money and mine, remember. Its Government Reveuie

SirHumphreyAppleby

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#2055720 13-Jul-2018 13:38

tdgeek:

This is about Amazon type taxes. Give an example of a hypothetical tax that a TPLAC might charge that we would have to charge NZ residents. I think you're grasping. Where does GST fit in as regards greed and waste? Whats a common sense approach to recive the GST that the Statute provides for, that we dont yet recieve from millions of small individual imports? Its your money and mine, remember. Its Government Reveuie

No, this is not about GST, it's about the actions of the ATO in the article @rugrat referenced, and their wider implications of such policies. If the ATO is allowed to come in and take from NZ businesses, then the same applies to everyone else. That cannot be allowed to happen.

tdgeek

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#2055762 13-Jul-2018 14:03

SirHumphreyAppleby:

tdgeek:

This is about Amazon type taxes. Give an example of a hypothetical tax that a TPLAC might charge that we would have to charge NZ residents. I think you're grasping. Where does GST fit in as regards greed and waste? Whats a common sense approach to recive the GST that the Statute provides for, that we dont yet recieve from millions of small individual imports? Its your money and mine, remember. Its Government Reveuie

No, this is not about GST, it's about the actions of the ATO in the article @rugrat referenced, and their wider implications of such policies. If the ATO is allowed to come in and take from NZ businesses, then the same applies to everyone else. That cannot be allowed to happen.

Ok, fair enough, ill read that later, this thread is about GST for small online ourchases

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#2055776 13-Jul-2018 14:21

tdgeek:
Geektastic:

Tzoi:

I mean, technically, IRD will be imposing a tax on NZ consumers, just they're forcing overseas companies to collect it.

Technically they are asking overseas companies to collect it, as I cannot see a legal method for them to force companies domiciled overseas to do anything at all.

IMV it would make more sense to increase the GST personal import limit and continue to collect it at the border as now. They could easily and effectively do this by removing shipping costs from the calculation, which is logical as well because 90% of the shipping 'service' takes place outside New Zealand anyway. Or they could just raise the limit to a more sensible level - say $750.

The issue is getting the GST collected on all consumed purchases, your suggestion does the opposite.

Because I think it's a dumb idea to waste so much time and effort on this.

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#2055927 13-Jul-2018 18:24

Geektastic:
tdgeek:

Geektastic:

Tzoi:

I mean, technically, IRD will be imposing a tax on NZ consumers, just they're forcing overseas companies to collect it.

Technically they are asking overseas companies to collect it, as I cannot see a legal method for them to force companies domiciled overseas to do anything at all.

IMV it would make more sense to increase the GST personal import limit and continue to collect it at the border as now. They could easily and effectively do this by removing shipping costs from the calculation, which is logical as well because 90% of the shipping 'service' takes place outside New Zealand anyway. Or they could just raise the limit to a more sensible level - say $750.

The issue is getting the GST collected on all consumed purchases, your suggestion does the opposite.

Because I think it's a dumb idea to waste so much time and effort on this.

Ok, whats a small purchase? <$100? Lets remove GST from every product that has a price of under $100

tdgeek

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#2055953 13-Jul-2018 19:41

SirHumphreyAppleby:

tdgeek:

This is about Amazon type taxes. Give an example of a hypothetical tax that a TPLAC might charge that we would have to charge NZ residents. I think you're grasping. Where does GST fit in as regards greed and waste? Whats a common sense approach to recive the GST that the Statute provides for, that we dont yet recieve from millions of small individual imports? Its your money and mine, remember. Its Government Reveuie

No, this is not about GST, it's about the actions of the ATO in the article @rugrat referenced, and their wider implications of such policies. If the ATO is allowed to come in and take from NZ businesses, then the same applies to everyone else. That cannot be allowed to happen.

I have read rugrats article. You said its not about GST. It IS about GST its the Oz version of this threads title. Amazon and Ebay have registered, amongst many much smaller retailers. Some have not, in the article. What is the issue? ATO can come and take from NZ businesses, as will the IRD, as will those that manage US sales taxes by state. They are levying a tax, and collecting it. Few seem to have an issue. If my dairy can sell me an ice cream and charge me GST, so can an Oz retailer that I sell to. As the sale will go to an Australian consumer, so of course that consumer needs to pay a price that includes GST, it doesnt matter if its me or my Oz retail counterpart.

Aredwood

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#2056030 14-Jul-2018 01:30

What needs to happen long term - is for countries to start recognising GST paid overseas.

The "old system" Is simply that you didn't have to charge GST to foreign buyers. And in turn, the government of the foreign country that your buyer is based in. Will then charge GST / duty etc directly to your buyer. This system worked OK when international trade consisted of only big purchases. And the buyers and sellers would be almost always companies or government entities. This system falls over nowdays. As often the foreign buyers are residential customers making small purchases. And even the exporters, are often just people who are running a hobby business on the side of their day job. So massive compliance costs in complying with the various tax laws. And same thing with the various government tax departments.

Lets say that someone in France wants to buy from me, and in doing so. I will need to pay GST to France. I need to find out if my item is liable for GST, what the correct rate is, Just to find out how much I need to charge my customer (Do I have to include shipping costs in that amount?). Then I need to pay it somehow. What is the name of the French equivalent to the IRD? How do you register with them? How do you submit a tax return, and how often do you need to do so? Do you have to keep on filing returns even if you didn't sell anything to France that month? How do they even accept payment? Do you need a French bank account? I then submit my tax return, and pay 5 EUR in GST. The resources that the French tax department would have to expend to process my return would be far bigger than that 5 EUR anyway.

Far easier if I could simply treat overseas customers the same as local customers. In that I charge NZ GST to both, and just pay the GST to the NZ government the same as now. And if the overseas customer is registered for GST in their home country, they would be able to claim GST back on items they have purchased from me. Assuming that trade between the 2 countries is relatively even. Both governments will still receive the same amount of tax. But without the massive compliance costs.

tdgeek

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#2056048 14-Jul-2018 08:37

An option is to charge GST on everything, as you say. But, when you do your GST return, you will have some French GST. So you do the easy GST return and its noted in that return that the French GST is $x. The NZ Govt will pay/refund French GST to France's IRD. That means a minor compliance for you (new accounting code for French GST), and the Govt has a minor task each month to pay to France. This way, GST is easy as its what everyone does now, just a small change to seperate overseas GST by country. Given that an accounting system has dozens and dozens of product and expense and balance sheet codes, no issue for a few more if anyone sells to other countries.

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#2056049 14-Jul-2018 09:01

tdgeek:

An option is to charge GST on everything, as you say. But, when you do your GST return, you will have some French GST. So you do the easy GST return and its noted in that return that the French GST is $x. The NZ Govt will pay/refund French GST to France's IRD. That means a minor compliance for you (new accounting code for French GST), and the Govt has a minor task each month to pay to France. This way, GST is easy as its what everyone does now, just a small change to seperate overseas GST by country. Given that an accounting system has dozens and dozens of product and expense and balance sheet codes, no issue for a few more if anyone sells to other countries.

Good to see you're finally coming around to seeing that the best way for this to be done is via the local tax system. Of course, that does require reciprocal agreements, which the ATO currently does not have, nor will the IRD by the time the system launches here. That won't stop them attempting to extort money from countries around the world, and sinking millions of taxpayer dollars in to it, until the companies are bankrupt, give in, or a loophole in the foreign law is found.

Even with agreements in place, it's still nowhere near as simple as you think. GST in Australia is fundamentally different from GST in New Zealand, as is GST in Canada. Australia operates variable tax rates depending on the type of product or service being sold, and the definitions aren't broad - a slight change in handling of a product can completely alter the tax rate. Sellers will be responsible for ensuring the correct tax rate is used when supplying to Australian residents. The Canadian system is even more complex, with GST, GST plus regional sales taxes, or HST with regional and government contributions combined. These rates are all subject to change. Then there are tax exempt organisations to consider.

It is completely unreasonable to expect businesses to comply with a constantly changing minefield of international tax regulations, when many small businesses struggle with already complex local tax obligations. Yes, GST may be relatively simple, in New Zealand, but sales tax is not universally simple.

NO, it is not reasonable to say a billing system will take care of it. Not everybody uses them, and even if you do, who is liable when the rates are wrong or someone messes up a calculation? Not the developers, the business. The business is the one the ATO (insert a long list of other tax authorities when they all jump on the bandwagon) will be coming after, because at the end of the day, it's the business that they believe owes them the money, even though in truth it's their own citizens that they are (too lazy/economically nonviable) to collect from, and the only ones they really have any legal authority to collect from.

The floodgates must be shut, and it must be done now.

tdgeek

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#2056056 14-Jul-2018 09:35

SirHumphreyAppleby:

tdgeek:

An option is to charge GST on everything, as you say. But, when you do your GST return, you will have some French GST. So you do the easy GST return and its noted in that return that the French GST is $x. The NZ Govt will pay/refund French GST to France's IRD. That means a minor compliance for you (new accounting code for French GST), and the Govt has a minor task each month to pay to France. This way, GST is easy as its what everyone does now, just a small change to seperate overseas GST by country. Given that an accounting system has dozens and dozens of product and expense and balance sheet codes, no issue for a few more if anyone sells to other countries.

Good to see you're finally coming around to seeing that the best way for this to be done is via the local tax system. Of course, that does require reciprocal agreements, which the ATO currently does not have, nor will the IRD by the time the system launches here. That won't stop them attempting to extort money from countries around the world, and sinking millions of taxpayer dollars in to it, until the companies are bankrupt, give in, or a loophole in the foreign law is found.

Even with agreements in place, it's still nowhere near as simple as you think. GST in Australia is fundamentally different from GST in New Zealand, as is GST in Canada. Australia operates variable tax rates depending on the type of product or service being sold, and the definitions aren't broad - a slight change in handling of a product can completely alter the tax rate. Sellers will be responsible for ensuring the correct tax rate is used when supplying to Australian residents. The Canadian system is even more complex, with GST, GST plus regional sales taxes, or HST with regional and government contributions combined. These rates are all subject to change. Then there are tax exempt organisations to consider.

It is completely unreasonable to expect businesses to comply with a constantly changing minefield of international tax regulations, when many small businesses struggle with already complex local tax obligations. Yes, GST may be relatively simple, in New Zealand, but sales tax is not universally simple.

NO, it is not reasonable to say a billing system will take care of it. Not everybody uses them, and even if you do, who is liable when the rates are wrong or someone messes up a calculation? Not the developers, the business. The business is the one the ATO (insert a long list of other tax authorities when they all jump on the bandwagon) will be coming after, because at the end of the day, it's the business that they believe owes them the money, even though in truth it's their own citizens that they are (too lazy/economically nonviable) to collect from, and the only ones they really have any legal authority to collect from.

The floodgates must be shut, and it must be done now.

Extorting from other countries around the world? Its collecting a tax. Does that mean IRD is extorting me when my ice cream has tax in it?

Companies are bankrupt? They collect a tax, remit to IRD that is a product cost that is passed onto consumers, its GST.

Variable tax rates. It seems that those countries businesses manage that quite ok.

Constantly changing minefield of international tax regulations. Not aware that taxes change every 5 minutes, its quite rare.

Everybody uses a billing system, that what invoices are

If the floodgates are collecting GST that is required by law, then do you suggest we remove GST? We can fund the Govt by another tax. And if another country uses GST/VAT we can comply with that, add it, remit it to their version of IRD

You seem to have little faith in how global computerisation makes things vey easy.

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#2056088 14-Jul-2018 10:01

SirHumphreyAppleby:

It is completely unreasonable to expect businesses to comply with a constantly changing minefield of international tax regulations, when many small businesses struggle with already complex local tax obligations. Yes, GST may be relatively simple, in New Zealand, but sales tax is not universally simple.

NO, it is not reasonable to say a billing system will take care of it. Not everybody uses them, and even if you do, who is liable when the rates are wrong or someone messes up a calculation? Not the developers, the business. The business is the one the ATO (insert a long list of other tax authorities when they all jump on the bandwagon) will be coming after, because at the end of the day, it's the business that they believe owes them the money, even though in truth it's their own citizens that they are (too lazy/economically nonviable) to collect from, and the only ones they really have any legal authority to collect from.

The floodgates must be shut, and it must be done now.

You are aware of course that the EU and UK have expected international businesses to register for and pay VAT on any sales to EU and UK citizens for decades right? You can't shut the barn door, the horse has not only bolted it's managed to catch an international flight and make it to another continent.

tdgeek

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#2056090 14-Jul-2018 10:20

Kyanar:

SirHumphreyAppleby:

It is completely unreasonable to expect businesses to comply with a constantly changing minefield of international tax regulations, when many small businesses struggle with already complex local tax obligations. Yes, GST may be relatively simple, in New Zealand, but sales tax is not universally simple.

NO, it is not reasonable to say a billing system will take care of it. Not everybody uses them, and even if you do, who is liable when the rates are wrong or someone messes up a calculation? Not the developers, the business. The business is the one the ATO (insert a long list of other tax authorities when they all jump on the bandwagon) will be coming after, because at the end of the day, it's the business that they believe owes them the money, even though in truth it's their own citizens that they are (too lazy/economically nonviable) to collect from, and the only ones they really have any legal authority to collect from.

The floodgates must be shut, and it must be done now.

You are aware of course that the EU and UK have expected international businesses to register for and pay VAT on any sales to EU and UK citizens for decades right? You can't shut the barn door, the horse has not only bolted it's managed to catch an international flight and make it to another continent.

Yes

We all talk about globalisation, the world being a smaller place. Its life. It used to be painful and costly to send a happy birthday telegram to England. The world is now aa small and close place. Open trade is the go these days for most countries except the US, and consumer tax is just a part of the big puzzle.

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