GST on shipping charges for overseas purchases = theft

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#1305628 15-May-2015 10:09

Mark: Hmmm ... I wonder what "GST" stands for ? And from that information would I be able to work out what it would apply to ?

:-)

Exactly. It's not a "Goods and Services sourced locally only" tax. Its a tax you pay for any goods and services you purchase. Whether they're local or not, you're paying for goods and/or a service, and you're subject to tax on that.

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#1305631 15-May-2015 10:10

heylinb4nz:
bazzer: The point is that the service is being provided to you in NZ. So there is GST on that. That's fair I think (insofar as GST is fair) since we pay GST on all goods and services in NZ.

As mentioned above, if you send something internationally you don't have to pay the GST (even though you would argue you should since some of the service is occurring in NZ).

It seems that for international shipping, quite a lot of the service is being provided in no-man's-land, so they make a call about how to categorise it, and they do that based on the destination.

The only portion of the service provided in NZ is delivery from Auckland Depot to my home, the majority of the service occurs outside of New Zealand and therefore should be exempt. Essentially the government are using a dirty piece of legislation to tax 100% of a service the majority of which occurs outside NZ.

I think a flat rate fee based on box size and weight range to get parcel from port of entry to destination would be fairer....but that would just be wishful thinking.

I agree. If something is shipped New York - Auckland - Your house, the shipping from NY to Auck is a service provided OUTSIDE NZ and usually by a non-NZ company. It does seem an extremely long bow to draw to claim that GST arises from that.

Obviously it can arise for delivery to your house from Auckland.

SirHumphreyAppleby

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#1305634 15-May-2015 10:16

D.W: Exactly. It's not a "Goods and Services sourced locally only" tax. Its a tax you pay for any goods and services you purchase. Whether they're local or not, you're paying for goods and/or a service, and you're subject to tax on that.

No, you do not pay GST on services provided outside the country, or goods obtained outside of the country which are not being brought in to the country. You also do not charge GST on goods being sent out of the country, or services being provided to people outside of the country.

So, the general rules IS "goods and services sourced and provided locally". The incoming postal charge is actually the anomaly here, and it's entirely valid to question it, just don't expect it to change any time soon.

The best solution to level the playing field with local retailers would actually be to abandon GST and duty on all imports. That will never happen, because it's a huge revenue stream, although given most of the profits are likely going to wholesalers (not many retailers import themselves), they'd likely hike (EDIT: I mean, not adjust) prices as soon as any concession were made, and the government would be no worse off.

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#1305635 15-May-2015 10:17

Geektastic:
heylinb4nz:
bazzer: The point is that the service is being provided to you in NZ. So there is GST on that. That's fair I think (insofar as GST is fair) since we pay GST on all goods and services in NZ.

As mentioned above, if you send something internationally you don't have to pay the GST (even though you would argue you should since some of the service is occurring in NZ).

It seems that for international shipping, quite a lot of the service is being provided in no-man's-land, so they make a call about how to categorise it, and they do that based on the destination.

The only portion of the service provided in NZ is delivery from Auckland Depot to my home, the majority of the service occurs outside of New Zealand and therefore should be exempt. Essentially the government are using a dirty piece of legislation to tax 100% of a service the majority of which occurs outside NZ.

I think a flat rate fee based on box size and weight range to get parcel from port of entry to destination would be fairer....but that would just be wishful thinking.

I agree. If something is shipped New York - Auckland - Your house, the shipping from NY to Auck is a service provided OUTSIDE NZ and usually by a non-NZ company. It does seem an extremely long bow to draw to claim that GST arises from that.

Obviously it can arise for delivery to your house from Auckland.

Yes, I see how you come to that opinion.

However, if you were to buy the same thing from a NZ retailer, their cost price will include freight to get it to NZ. They have to charge GST on that cost price. Why should it be different if you are importing it instead of them or their wholesaler/distributor?

D.W

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#1305650 15-May-2015 10:27

SirHumphreyAppleby:
D.W: Exactly. It's not a "Goods and Services sourced locally only" tax. Its a tax you pay for any goods and services you purchase. Whether they're local or not, you're paying for goods and/or a service, and you're subject to tax on that.

No, you do not pay GST on services provided outside the country, or goods obtained outside of the country which are not being brought in to the country. You also do not charge GST on goods being sent out of the country, or services being provided to people outside of the country.

So, the general rules IS "goods and services sourced and provided locally". The incoming postal charge is actually the anomaly here, and it's entirely valid to question it, just don't expect it to change any time soon.

The best solution to level the playing field with local retailers would actually be to abandon GST and duty on all imports. That will never happen, because it's a huge revenue stream, although given most of the profits are likely going to wholesalers (not many retailers import themselves), they'd likely hike (EDIT: I mean, not adjust) prices as soon as any concession were made, and the government would be no worse off.

You're right, it is only for goods coming into the country (or sourced locally), I didn't specify that. Regardless, GST is calculated on the cost of the item, and the cost of importing seems like it should be factored into that cost.

frankv

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#1305753 15-May-2015 12:35

Bung:
frankv: NB: You only pay GST on the last leg of shipping to NZ.... e.g. if the engine goes from New York to Los Angeles to NZ, you don't pay GST on the NY-LA shipping cost.

What is your basis for that advice?

Personal experience importing stuff. Admittedly this was over 10 years ago.

You don't pay GST on shipping from one overseas place to another (in my case it was North Bend, Oregon to Portland, Oregon by truck). I had to pay GST on the item itself, the shipping from Portland to Auckland, then a bunch of ticket-clippers for a bunch of things at the port, then trucking within NZ.

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AACTech

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#1306263 16-May-2015 13:08

When I was in Canada and purchased goods like RAM, routers, etc. from the USA I often was not charrged any GST what so ever. Not because the government allowed this but couldn't they couldn't easily enforce it on small items.

To add to the GST comments. Isn't GST the fairest form of taxation? You know, if you can afford to buy expensive stuff you can afford to pay the tax.

Rikkitic

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#1306282 16-May-2015 13:24

AACTech: When I was in Canada and purchased goods like RAM, routers, etc. from the USA I often was not charrged any GST what so ever. Not because the government allowed this but couldn't they couldn't easily enforce it on small items.

To add to the GST comments. Isn't GST the fairest form of taxation? You know, if you can afford to buy expensive stuff you can afford to pay the tax.

If you are poor, it just makes you poorer. Rich people may eat better food, but they still cannot eat more than someone on a budget. The relative tax compared to income is extremely unfair. Same with fines (see Finland for progressive example). Someone with a million dollars isn't going to miss $1,000 as much as someone working at Burger Paradise. The pain should be proportionate to the ability to carry it.

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AACTech

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#1306310 16-May-2015 14:49

Rikkitic:
AACTech: When I was in Canada and purchased goods like RAM, routers, etc. from the USA I often was not charrged any GST what so ever. Not because the government allowed this but couldn't they couldn't easily enforce it on small items.

To add to the GST comments. Isn't GST the fairest form of taxation? You know, if you can afford to buy expensive stuff you can afford to pay the tax.

If you are poor, it just makes you poorer. Rich people may eat better food, but they still cannot eat more than someone on a budget. The relative tax compared to income is extremely unfair. Same with fines (see Finland for progressive example). Someone with a million dollars isn't going to miss $1,000 as much as someone working at Burger Paradise. The pain should be proportionate to the ability to carry it.

I've only just arrived here so do not know NZ income tax rules yet. In Canada the rich have so many legal options to avoid paying taxes that GST is the only way they actually end up paying. One way is that their private pension plan contributions give tax deductions. Nice if you can afford to contribute to a plan.

Also basic food and rent is GST free in Canada so the poor do benifit, somewhat.

Geektastic

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#1306440 16-May-2015 22:12

trig42:
Geektastic:
heylinb4nz:
bazzer: The point is that the service is being provided to you in NZ. So there is GST on that. That's fair I think (insofar as GST is fair) since we pay GST on all goods and services in NZ.

As mentioned above, if you send something internationally you don't have to pay the GST (even though you would argue you should since some of the service is occurring in NZ).

It seems that for international shipping, quite a lot of the service is being provided in no-man's-land, so they make a call about how to categorise it, and they do that based on the destination.

The only portion of the service provided in NZ is delivery from Auckland Depot to my home, the majority of the service occurs outside of New Zealand and therefore should be exempt. Essentially the government are using a dirty piece of legislation to tax 100% of a service the majority of which occurs outside NZ.

I think a flat rate fee based on box size and weight range to get parcel from port of entry to destination would be fairer....but that would just be wishful thinking.

I agree. If something is shipped New York - Auckland - Your house, the shipping from NY to Auck is a service provided OUTSIDE NZ and usually by a non-NZ company. It does seem an extremely long bow to draw to claim that GST arises from that.

Obviously it can arise for delivery to your house from Auckland.

Yes, I see how you come to that opinion.

However, if you were to buy the same thing from a NZ retailer, their cost price will include freight to get it to NZ. They have to charge GST on that cost price. Why should it be different if you are importing it instead of them or their wholesaler/distributor?

There is no more reason why their shipping from overseas should include GST that there is that mine should. You're attacking this from the wrong end!

Geektastic

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#1306441 16-May-2015 22:15

AACTech: When I was in Canada and purchased goods like RAM, routers, etc. from the USA I often was not charrged any GST what so ever. Not because the government allowed this but couldn't they couldn't easily enforce it on small items.

To add to the GST comments. Isn't GST the fairest form of taxation? You know, if you can afford to buy expensive stuff you can afford to pay the tax.

Well, food is not 'expensive stuff' technically (although it does tend to be here!).

By all means have expensive GST - but if you do, income taxes should be commensurately smaller.

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#1306464 17-May-2015 07:05

Geektastic:
AACTech: When I was in Canada and purchased goods like RAM, routers, etc. from the USA I often was not charrged any GST what so ever. Not because the government allowed this but couldn't they couldn't easily enforce it on small items.

To add to the GST comments. Isn't GST the fairest form of taxation? You know, if you can afford to buy expensive stuff you can afford to pay the tax.

Well, food is not 'expensive stuff' technically (although it does tend to be here!).

By all means have expensive GST - but if you do, income taxes should be commensurately smaller.

Income tax has been reduced due to GST

Here is a crazy notion, lets give peace a chance.

MikeB4

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#1306465 17-May-2015 07:12

Some food for thought, NZ is second overall and first for individual tax competitiveness

http://www.forbes.com/sites/realspin/2014/09/22/the-u-s-ranks-32nd-out-of-34-oecd-countries-in-tax-code-competitiveness/

Here is a crazy notion, lets give peace a chance.

Gilco2

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#1306467 17-May-2015 08:08

have to admit I am not sure what all charges are. Like whatsmyduty. I did a test all round figures here. $410 computer item. it has duty $0 etc but just lists gst of $61. At the bottom it say $108 to pay. It doent have anywhere on the page what the extra $47 charge is for. Obvious though that you are paying gst plus other unspecified charges which would make an item dearer than buying here in some cases.

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SirHumphreyAppleby

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#1306469 17-May-2015 08:13

Gilco2: have to admit I am not sure what all charges are. Like whatsmyduty. I did a test all round figures here. $410 computer item. it has duty $0 etc but just lists gst of $61. At the bottom it say $108 to pay. It doent have anywhere on the page what the extra $47 charge is for. Obvious though that you are paying gst plus other unspecified charges which would make an item dearer than buying here in some cases.

Import transaction fee $25.44
GST on import transaction fee $3.82
Biosecurity levy $15.33
GST on biosecurity levy $2.30

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