Just realised

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skykissme

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#11992 22-Feb-2007 14:31

hmmm... did a bad move..

I thought buying a software from non New Zealand internet might be cheaper, after currency exchange rate, for a small business. Turn out to be wrong. Got a big smack in head by an accountant.

I just realized that if I buy AVG from a New Zealand company I can claim GST back but no chance of doing so if I buy it from non New Zealand source.

Sorry boss, I'm guilty of all charge.

Now working with a new company, I won't make the same mistake again.

We'll never be too old to learn, and we learn at least one new thing every day.

grant_k

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#61583 22-Feb-2007 14:38

skykissme: I just realized that if I buy AVG from a New Zealand company I can claim GST back but no chance of doing so if I buy it from non New Zealand source.

That's only true if you are making a low-value purchase where the GST would be less than $50. In this case, Customs waive the GST.

But if you are importing something with a larger value where the GST is more than $50, Customs or your freight forwarder/NZ Post etc, will add the GST and require you to pay it before you can uplift the goods.

So in that case, you WILL be able to claim the GST back as an Input Credit on your next GST return.

If you are importing goods as a business rather than as a private person, GST makes no difference because you just claim it back as I explained above

It's the poor end-user who gets lumbered with it if they are not running a business which is registered for GST

freitasm

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#61585 22-Feb-2007 14:40

Except if you purchase software for download such as Avast AV, which costs way more than US$500 per server but there's no "goods" in transit, so no taxation at the border.

grant_k

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#61587 22-Feb-2007 14:46

freitasm: Except if you purchase software for download such as Avast AV, which costs way more than US$500 per server but there's no "goods" in transit, so no taxation at the border.

Aha!!! But you are supposed to declare it voluntarily to IRD and pay the GST... You did do this right???

If you read the IRD's Taxation Bulletins you will see that this was explained a year or two back. However, to my way of thinking it's an extremely difficult law to police and how much GST would the IRD get from it compared to what they would spend policing it?

I guess if you are a big corporate i.e. above the radar, and spend a few $million buying some fancy package from overseas, then you would have no choice but to declare it, but there probably aren't too many transactions at that level done directly with overseas suppliers. Most would have a local office in which case GST would be added to the purchase price in NZ.

skykissme

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#61589 22-Feb-2007 14:51

Well... my situation was.. I brought AVG for my previous employer.. costed about A$750 on the web there was no option to opt out the GST. Charged on company credit card $809.67, thought it was cheaper than buying it in NZ.. $800 plus gst. ($900 incl gst) I thought I'd help my boss save some $$.

Anyway, I'm now working part-time for another company.. and talking to my new boss that I know where to get AVG perhaps cheaper than one he found on Google. And got told of by his accountant who was coming to see him.

We'll never be too old to learn, and we learn at least one new thing every day.

grant_k

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#61591 22-Feb-2007 14:56

skykissme: ...Charged on company credit card $809.67, thought it was cheaper than buying it in NZ.. $800 plus gst. ($900 incl gst) I thought I'd help my boss save some $$.

Yeah, so in your case you've been pretty lucky as it only cost $9.67 extra.

Sometimes, by the time you add shipping costs, it can be cheaper to buy it in NZ, however for software it's a different story because it's a direct download.

This is an unusual situation because normally you will find the local distributor charges MORE in some cases much more, than what you would pay to download it via the web.

And sure, you can't claim GST back on the downloaded product, but then you didn't pay it in the first place, so you are no worse off.

Moral of the story: It always pays to check out alternatives before typing in your Credit Card number...

sbiddle

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#61595 22-Feb-2007 15:10

There is also the issue of Australian GST - because the product was not intended for the Australian market you should have saved 10%. It's hard to do this when you buy a downloadable product online.

grant_k

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#61597 22-Feb-2007 15:16

sbiddle:
There is also the issue of Australian GST - because the product was not intended for the Australian market you should have saved 10%. It's hard to do this when you buy a downloadable product online.

No, not always true. The Australian suppliers I have dealt with are usually savvy enough not to add Australian GST on export orders, in the same way we do here.

However, each on-line store will be different so it would pay to check this at the time of ordering.