Overseas Purchasing - GST Threshold about to be reduced

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2886 posts

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#1359690 5-Aug-2015 21:28

Geektastic:

There is no logic to taxing people spending money which you already taxed anyway: the whole concept of GST or VAT is as mad as a hatter unless you scrap income tax to compensate.

That's what they did do. Income tax rates were cut substantially at the same time GST was introduced.

JimmyH

2886 posts

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#1359692 5-Aug-2015 21:33

shk292: What about if you have an "aunt" in USA who sends you "presents" from time to time? Would these attract GST? I can see a business niche for an "aunt" service

Yep. And in my crystal ball I can see a few painful tax fraud cases once IRD/Customs cotton on and take a look at who is using this "aunt service".

If you think that the Police and the Crimes Act can make your life hell, they haven't got anything on the IRD/Customs when it comes to powers and ability to nail your scalp to a wall. It really isn't worth the risk of messing with those guys and deliberately committing tax fraud for the sake of saving a few dollars on an online purchase.

old3eyes

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#1359695 5-Aug-2015 21:52

JimmyH:
Geektastic:

There is no logic to taxing people spending money which you already taxed anyway: the whole concept of GST or VAT is as mad as a hatter unless you scrap income tax to compensate.

That's what they did do. Income tax rates were cut substantially at the same time GST was introduced.

Not that I remember. Import duties were reduced or cancelled when GST was introduced but I don't remember income tax going down.

Regards,

Old3eyes

michael001

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#1359702 5-Aug-2015 21:56

sleemanj:
shk292: What about if you have an "aunt" in USA who sends you "presents" from time to time? Would these attract GST?

Yes. There is no practical difference if the article is declared as a gift or not, over threshold, GST liable.

Indeed, most everything from China is marked as a Gift anyway.

So, at some stage in the future my mother in law will post over some shirts, socks and packets of miso soup from Japan for my birthday and then, one week before my birthday, I will get a letter in the post from a government department advising that I owe $28 in GST before my birthday present can be released?

That is f-ing moronic. What are we doing here? Creating ways to make ourselves miserable?

Geektastic

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#1359706 5-Aug-2015 22:14

JimmyH:
Geektastic:

There is no logic to taxing people spending money which you already taxed anyway: the whole concept of GST or VAT is as mad as a hatter unless you scrap income tax to compensate.

That's what they did do. Income tax rates were cut substantially at the same time GST was introduced.

Really? In that case they must have been obscene.

I had something more like a 15% flat rate in mind.

Geektastic

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#1359707 5-Aug-2015 22:15

michael001:
sleemanj:
shk292: What about if you have an "aunt" in USA who sends you "presents" from time to time? Would these attract GST?

Yes. There is no practical difference if the article is declared as a gift or not, over threshold, GST liable.

Indeed, most everything from China is marked as a Gift anyway.

So, at some stage in the future my mother in law will post over some shirts, socks and packets of miso soup from Japan for my birthday and then, one week before my birthday, I will get a letter in the post from a government department advising that I owe $28 in GST before my birthday present can be released?

That is f-ing moronic. What are we doing here? Creating ways to make ourselves miserable?

You have a "duty" to pay tax so it can be wasted on your behalf.

Be happy. Sing the Company Song...

Geektastic

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#1359710 5-Aug-2015 22:17

JimmyH:
shk292: What about if you have an "aunt" in USA who sends you "presents" from time to time? Would these attract GST? I can see a business niche for an "aunt" service

Yep. And in my crystal ball I can see a few painful tax fraud cases once IRD/Customs cotton on and take a look at who is using this "aunt service".

If you think that the Police and the Crimes Act can make your life hell, they haven't got anything on the IRD/Customs when it comes to powers and ability to nail your scalp to a wall. It really isn't worth the risk of messing with those guys and deliberately committing tax fraud for the sake of saving a few dollars on an online purchase.

Revenue and customs wallahs around the world are getting altogether far too much power as governments scramble to squeeze us until we squeak.

In the UK they can now simply take money from your bank accounts without minor inconveniences like bothering to get a judge to hear the case.

Sharesies

Trade NZ and US shares and funds with Sharesies (affiliate link).

mattwnz

20164 posts

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#1359761 5-Aug-2015 23:48

michael001:
sleemanj:
shk292: What about if you have an "aunt" in USA who sends you "presents" from time to time? Would these attract GST?

Yes. There is no practical difference if the article is declared as a gift or not, over threshold, GST liable.

Indeed, most everything from China is marked as a Gift anyway.

So, at some stage in the future my mother in law will post over some shirts, socks and packets of miso soup from Japan for my birthday and then, one week before my birthday, I will get a letter in the post from a government department advising that I owe $28 in GST before my birthday present can be released?

That is f-ing moronic. What are we doing here? Creating ways to make ourselves miserable?

With gifts, the VAT /GST etc tax is already paid in the country that the goods are sent from. So I don't believe they would be liable for GST when coming into NZ, otherwise they would be getting double taxed. I believe the sender has to sign some form of declaration anyway saying the value and that they are gifts, or something similar on the package.

Bung

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#1359787 6-Aug-2015 07:41

old3eyes:
JimmyH:
Geektastic:

There is no logic to taxing people spending money which you already taxed anyway: the whole concept of GST or VAT is as mad as a hatter unless you scrap income tax to compensate.

That's what they did do. Income tax rates were cut substantially at the same time GST was introduced.

Not that I remember. Import duties were reduced or cancelled when GST was introduced but I don't remember income tax going down.

Maybe you weren't paying the 66% top rate :-D

"New Zealand went through a major program of tax reform in the 1980s. The top marginal rate of income tax was reduced from 66% to 33% (changed to 39% in April 2000, 38% in April 2009 and 33% on 1 October 2010) and corporate income tax rate from 48% to 33% (changed to 30% in 2008 and to 28% on 1 October 2010). Goods and services tax was introduced, initially at a rate of 10% (then 12.5% and now 15%, as of 1 October 2010)."

Roger Douglas did want to have an even lower income tax rate and higher GST but Lange got the speed wobbles and stopped for a "cup of tea".

graemeh

2078 posts

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#1359825 6-Aug-2015 09:22

mattwnz: With gifts, the VAT /GST etc tax is already paid in the country that the goods are sent from. So I don't believe they would be liable for GST when coming into NZ, otherwise they would be getting double taxed. I believe the sender has to sign some form of declaration anyway saying the value and that they are gifts, or something similar on the package.

It doesn't matter. NZ still wants their tax (both GST and Duty, if applicable). The only reasons a gift is not taxed is either because it is below the tax threshold or the fact it was over the threshold was missed by customs or whoever does the screening.

Geektastic

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#1359855 6-Aug-2015 10:16

graemeh:
mattwnz: With gifts, the VAT /GST etc tax is already paid in the country that the goods are sent from. So I don't believe they would be liable for GST when coming into NZ, otherwise they would be getting double taxed. I believe the sender has to sign some form of declaration anyway saying the value and that they are gifts, or something similar on the package.

It doesn't matter. NZ still wants their tax (both GST and Duty, if applicable). The only reasons a gift is not taxed is either because it is below the tax threshold or the fact it was over the threshold was missed by customs or whoever does the screening.

They wanted me to pay tax on a gold watch I inherited from my father.

I simply waited until I went back to the UK next and wore it home..!

trig42

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#1359861 6-Aug-2015 10:26

michael001:
sleemanj:
shk292: What about if you have an "aunt" in USA who sends you "presents" from time to time? Would these attract GST?

Yes. There is no practical difference if the article is declared as a gift or not, over threshold, GST liable.

Indeed, most everything from China is marked as a Gift anyway.

So, at some stage in the future my mother in law will post over some shirts, socks and packets of miso soup from Japan for my birthday and then, one week before my birthday, I will get a letter in the post from a government department advising that I owe $28 in GST before my birthday present can be released?

That is f-ing moronic. What are we doing here? Creating ways to make ourselves miserable?

That already happens going the other way. The UK taxes gifts.

Try and send a gift to someone in the UK.
They will get the letter and have to jump through bureaucratic hoops to get their present.

You think NZ is bad, try dealing with English bureaucracy!

shk292

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#1359870 6-Aug-2015 10:42

trig42:
michael001:
sleemanj:
shk292: What about if you have an "aunt" in USA who sends you "presents" from time to time? Would these attract GST?

Yes. There is no practical difference if the article is declared as a gift or not, over threshold, GST liable.

Indeed, most everything from China is marked as a Gift anyway.

So, at some stage in the future my mother in law will post over some shirts, socks and packets of miso soup from Japan for my birthday and then, one week before my birthday, I will get a letter in the post from a government department advising that I owe $28 in GST before my birthday present can be released?

That is f-ing moronic. What are we doing here? Creating ways to make ourselves miserable?

That already happens going the other way. The UK taxes gifts.

Try and send a gift to someone in the UK.
They will get the letter and have to jump through bureaucratic hoops to get their present.

You think NZ is bad, try dealing with English bureaucracy!

So, perhaps we should learn from that and not introduce the same sort of BS here
I have no objection to paying GST on imports; I do object to paying disproportionate administrative or other costs, or having imports delayed. Similarly, if GST is going to be levied on import, it should be made possible to have it refunded on export - ie if I'm going to have to pay GST on the Lego set my kids get sent for Christmas, I should be able to reclaim it on the gift I send to my overseas nephew

wasabi2k

2096 posts

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#1359895 6-Aug-2015 11:17

Geektastic:
JimmyH:
Geektastic:

There is no logic to taxing people spending money which you already taxed anyway: the whole concept of GST or VAT is as mad as a hatter unless you scrap income tax to compensate.

That's what they did do. Income tax rates were cut substantially at the same time GST was introduced.

Really? In that case they must have been obscene.

I had something more like a 15% flat rate in mind.

15% flat tax rate?

uh-huh.

Is this before or after we abolish all publicly funded anything, everywhere?

I think there may be a few flaws in your thinking if you believe a 15% flat tax rate is achievable.

trig42

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#1359907 6-Aug-2015 11:28

shk292:
trig42:
michael001:
sleemanj:
shk292: What about if you have an "aunt" in USA who sends you "presents" from time to time? Would these attract GST?

Yes. There is no practical difference if the article is declared as a gift or not, over threshold, GST liable.

Indeed, most everything from China is marked as a Gift anyway.

So, at some stage in the future my mother in law will post over some shirts, socks and packets of miso soup from Japan for my birthday and then, one week before my birthday, I will get a letter in the post from a government department advising that I owe $28 in GST before my birthday present can be released?

That is f-ing moronic. What are we doing here? Creating ways to make ourselves miserable?

That already happens going the other way. The UK taxes gifts.

Try and send a gift to someone in the UK.
They will get the letter and have to jump through bureaucratic hoops to get their present.

You think NZ is bad, try dealing with English bureaucracy!

So, perhaps we should learn from that and not introduce the same sort of BS here
I have no objection to paying GST on imports; I do object to paying disproportionate administrative or other costs, or having imports delayed. Similarly, if GST is going to be levied on import, it should be made possible to have it refunded on export - ie if I'm going to have to pay GST on the Lego set my kids get sent for Christmas, I should be able to reclaim it on the gift I send to my overseas nephew

Agreed, it is stupid.

I, too, have no issues with paying GST on anything I choose to import, but I will stop importing smaller items if I have to pay a fee on top of the tax (Or, I will just consolidate to make the fee a much smaller percentage, then on-sell some of the extra stuff I import - will the retailers be happy about that?).

I do not see how it will be workable collecting paltry amounts of GST without the fee though. There will be a fee.

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