GST to be charged on purchases below $400

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2851 posts

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#2006096 1-May-2018 15:54

frankv:

Wonder if the Govt realises how Wild West AliExpress is? e.g. an offer, completely unprompted, from a supplier on AliEx to invoice my item at whatever price I wanted. I wouldn't trust them to collect GST for me!

Then you lose your buyer protection. You'd need to bypass AliExpress and pay directly, as AliExpress will be doing the collection.

Keep this in mind... tax avoidance is fine, tax evasion is a crime.

Rikkitic

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#2006098 1-May-2018 15:55

Hammerer:

Rikkitic:

I withdrew from the JA thread because I was fed up with the poisonous rabid right rants there from you and your gang of four. Don't infect every other thread on Geekzone with your obsessions. Everyone here is perfectly capable of working out for themselves what the government is doing and what they think about it. They don't need your constant reminders. You have already taken over one thread with your ceaseless shouting. Leave it at that.

And just for your information (and that of your handful of followers), I still prefer this government to any National-led one I have ever experienced. Even if you were right that it is dishonest, incompetent, and hopeless, I would still prefer it.

Why would you say that?

I really don't care whether "left" or "right" are the government but I do care about specific actions. Saying that you would support the party in government being dishonest, incompetent, and hopeless is much more "rabid" than anything I've read @networkn say.

That sort of "rabid" thinking was behind British socialists denying millions of deaths and state-run repression in Soviet Russia even when they had witnessed specific acts at first hand. That's the sort of rabid thinking that gifts government to extremely dangerous organisations.

How about you leave it out!?

This discussion belongs elsewhere. I am not the one who thinks this government is the things that were quoted. That obsession belongs to others. On the basis of what it has actually done and said it intends to do, I still prefer it to any alternative. If I change my mind I will let you know.

Plesse igmore amd axxept applogies in adbance fir anu typos

rugrat

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#2006104 1-May-2018 16:03

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

richms

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#2006136 1-May-2018 16:46

So I guess this will be the end of jaycar selling $1.40 arduino clones for $39.95 then since the extra 15% will make it all fair and stuff?

Anyway, how the hell will this work with claiming back GST on these? The invoice is normally in USD, either paid from my USD paypal account or else converted by ASB as it hits my visa card. Sounds like a hell of a lot more work to get it back than from local sellers who have a NZD amount on the invoice they have to give you. Who knows what documents the overseas sellers will be giving you to prove GST paid on something?

Richard rich.ms

jarledb

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#2006139 1-May-2018 16:49

richms:

Anyway, how the hell will this work with claiming back GST on these?

You will have to deal with currency conversions. I have this trouble with US/Norwegian transactions where Norway has the same kind of rules for adding GST as New Zealand is getting.

If you are buying anything for business in USD you already have to deal with conversions. The only thing new is that you will have to convert the 15% added GST as well.

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richms

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#2006141 1-May-2018 16:49

Actually if this means I can prepay my GST thru shipito on my US purchases and not deal with the mega hassle of DHL GST and added costs, I might end up buying a hell of a lot more thru it since if I can get the GST back without too much hassle, then things will work out cheaper than GST and biosecurity carryon and other made up clearance costs.

Richard rich.ms

richms

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#2006142 1-May-2018 16:52

jarledb:

richms:

Anyway, how the hell will this work with claiming back GST on these?

You will have to deal with currency conversions. I have this trouble with US/Norwegian transactions where Norway has the same kind of rules for adding GST as New Zealand is getting.

If you are buying anything for business in USD you already have to deal with conversions. The only thing new is that you will have to convert the 15% added GST as well.

I got rid of the GST registration many years back because I didn't end up contracting so wasn't able to claim PC purchases etc back. With other income streams coming up and this new stuff it will mean revisiting the idea of being GST registered and taking the hobby stuff into something slightly serious.

Richard rich.ms

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mdf

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#2006143 1-May-2018 16:52

For digital offshore transactions, you don't pay GST if you provide your GST number when you sign up (you obviously don't get the input credit either). Wonder if they'll adopt a similar system for physical transactions?

marej

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#2006144 1-May-2018 16:56

jarledb:

richms:

Anyway, how the hell will this work with claiming back GST on these?

You will have to deal with currency conversions. I have this trouble with US/Norwegian transactions where Norway has the same kind of rules for adding GST as New Zealand is getting.

If you are buying anything for business in USD you already have to deal with conversions. The only thing new is that you will have to convert the 15% added GST as well.

GST component has to be in NZD. I believe a lot of smaller players will just stop shipping here because updating their systems to automate it will not be worth the hassle.

Tzoi

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#2006145 1-May-2018 16:56

Hi all, I've read all the discussion documents and papers released as part of my work so I can give a bit of an overview as to some of the questions you guys have had:

Suppliers are required to register for GST if they make supplies to NZ of over $60k a year (excluding business to business sales which would not be subject to the GST if the recipient business is GST-registered), similar to domestic suppliers and those subject to the 'Netflix tax'. A company that sells $60k worth of goods to NZers would probably comply because that would be a significant amount of revenue they would be giving up if they didn't comply and stopped shipping to NZ
If the recipient is GST-registered and provides that number to the supplier, then the supplier does not have to charge GST or can choose to zero-rate it (which would allow the supplier to claim input tax if it has any).
If the suppliers do not meet that threshold, they do not need to register for GST and you will not be charged GST on purchases from them. This is similar to suppliers in NZ who don't meet the threshold, though generally they will register to claim input tax.

GST will still be collected on goods over $400 under the current system for supplies from both GST-registered suppliers and unregistered suppliers. This is rather confusing as GST-registered overseas suppliers will only have to collect GST on goods under $400, with no GST on ones above that threshold, leaving it to Customs to charge it. However, it is only if individual goods are over this threshold. My understanding is if you buy a bunch of goods which in total are more than this threshold then the supplier will still charge the GST, not Customs.

"Marketplaces" and "re-deliverers" will be required to register for GST if they facilitate sales or forward sales of over $60k. This will catch Amazon, Aliexpress, and freight-forwarders etc.

IRD notes they have no real way of enforcing compliance, similarly to the the 'Netflix tax', however many large companies comply because it looks better for them (while a lot of people allege that these companies don't pay tax, generally they do pay tax, just potentially not enough - if they don't pay this it would be more akin to actual evasion and look worse), and NZ does have agreements with most major trading partners for assistance in collection of GST. Penalties and interest will apply too.

Let me know if you have any other questions and I will try and address them.

rayonline

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#2006147 1-May-2018 17:05

richms:

So I guess this will be the end of jaycar selling $1.40 arduino clones for $39.95 then since the extra 15% will make it all fair and stuff?

Anyway, how the hell will this work with claiming back GST on these? The invoice is normally in USD, either paid from my USD paypal account or else converted by ASB as it hits my visa card. Sounds like a hell of a lot more work to get it back than from local sellers who have a NZD amount on the invoice they have to give you. Who knows what documents the overseas sellers will be giving you to prove GST paid on something?

Not sure specifically. With overseas shares with the FIF reporting. They allow mid monthly FX rates to be used with USD conversions. The IRD updates a table with this online.

prob

225 posts

Master Geek

#2006148 1-May-2018 17:06

Thanks for the helpful summary.

As regards the rights and wrongs of collecting GST we are fast approaching the point where Godwin's Law applies.

wratterus

1687 posts

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#2006152 1-May-2018 17:26

@Tzoi,

So let's say I buy an item from a random seller on AliExpress, worth say $140 NZD.

From my understanding, once this law comes into effect, I should be charged 15% on top of the $140 at the time of checkout, so I pay $161 to AliExpress, they ship the item. How will customs know that I have paid GST on that item? How will they contact me to confirm that? A letter?

And how do AliExpress pay that $21 of GST they have collected to our Government?

Are customs going to now look at every package? How can they possibly have the man power and funds to do that? If they don't, then surely there is potential for many items sent from 'unregistered' sellers to pass through with no tax charged on that item.

I can see why this has never been brought in before - because it's obviously a massive hassle. With them dropping the current fees, are they actually going to make anything off this? With the increased admin costs and whatever else needs to be put in place, surely this is just to stop the retailers complaining - it seems to me like it might actually cost money to enforce it!

And what about gifts?

networkn

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#2006154 1-May-2018 17:29

I am interested to know what happens with warranty replacements too?

My sister got pinged not only GST but inspection fees etc on a warranty replacement of a digital item a few years ago. She tried to talk to customs, but they refused to release the item until she paid.

rayonline

1734 posts

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#2006155 1-May-2018 17:30

wratterus:

@Tzoi,

So let's say I buy an item from a random seller on AliExpress, worth say $140 NZD.

From my understanding, once this law comes into effect, I should be charged 15% on top of the $140 at the time of checkout, so I pay $161 to AliExpress, they ship the item. How will customs know that I have paid GST on that item? How will they contact me to confirm that? A letter?

And how do AliExpress pay that $21 of GST they have collected to our Government?

Are customs going to now look at every package? How can they possibly have the man power and funds to do that? If they don't, then surely there is potential for many items sent from 'unregistered' sellers to pass through with no tax charged on that item.

I can see why this has never been brought in before - because it's obviously a massive hassle. With them dropping the current fees, are they actually going to make anything off this? With the increased admin costs and whatever else needs to be put in place, surely this is just to stop the retailers complaining - it seems to me like it might actually cost money to enforce it!

And what about gifts?

Maybe Aliexpress the company will be doing that? Sellers will be then paying Aliexpress and Aliexpress paying the NZ IRD?

Customs don't care about gifts. Last time I rang them they said if you receive a gift over $400 as of now, they said even if it had a birthday card inside it, it will be taxed at border.

<$400 Customs isn't involved. They do this via eBay or Aliexpress, Amazon etc ...

Edit.

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

AND IF I BUY SOMETHING FROM A SMALL TRADER THROUGH THE LIKES OF EBAY OR ALIBABA?

Online marketplaces will be treated like large foreign sellers, even if they are just the "middleman". So the operators of those sorts of marketplaces will be responsible for adding GST to your bill, even if the final seller is actually a small trader.

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