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  Reply # 1902922 16-Nov-2017 20:44
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surfisup1000:

Geektastic:


It's similar to capital gains tax - it won't change house prices much (see UK and Australia for details....!) but it will make more tax at our expense.



The lack of a comprehensive capital gains tax does skew investment decisions though . Australian house prices might have increased even further if they did not have a CGT.  It was inevitable for asset prices to rise anyway because of the huge amount of money that was printed. 


I'm all for a CGT if they reduce income taxes to compensate. 


House prices are ridiculously high because of the huge increase in monetary supply (US and UK printed a crap load of money) and very low interest rates.   Interesting times , because quite a few people are saying the debt monster that we have created could destroy the global economy. 


 



Be careful what you wish for. As the easiest way of avoiding a capital gains tax is to not sell any houses. In other words people will only sell their houses if they have to. A CGT might actually cause house prices to increase. As less people selling means less houses available, therefore prices rise due to lower supply.

Imagine you have a growing family or you want to move to a new area, meaning You need a bigger or new house. You are now more likely to either over capitalise the house with expensive renovations instead of selling and buying a bigger house. Or you will still buy the new house and keep the old one as a rental. Even if both options mean loosing money, the loss is offset by not needing to pay a CGT.





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  Reply # 1902964 16-Nov-2017 21:02
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I read in the NZ Herald about the new government making all overseas purchases have GST added.  I read the whole article and it was typical lazy journalism - no mention of how it will be achieved.  I thought I'd check in geekzone and maybe create a thread, but I found this thread so I'll participate here.

 

dafman:

 

 

 

I don't mind paying GST on my discretionary overseas purchases if it creates a level playing field for local companies, plus contributes to fixing years of social neglect.

 

 

Ah, exactly my thought.  The concept is fine, pay 15% GST on everything.

 

BlinkyBill: Morally, what’s the difference between a multi-national using foreign jurisdictions to avoid income tax, and consumers purchasing overseas to avoid consumption tax?

 

Yes, people shouldn't deliberately avoid tax, our government needs tax to pay for health, education, justice, social welfare, etc.

 

But how will it be done?  When I buy something from China for NZ$2.90 with free international shipping - will I now pay GST?  If so, then how?

 

tdgeek:

 

My suggestion was that there is no way that we can have all offshore retailers being GST registered or forcing them to add GST to their foreign invoice and send the funds to the IRD. The banking system is one system that is intermediary, hence it will be common to almost everyone. if there was a way to tag  NZ payments to offshore as for importing goods, to bill GST by the NZ paying bank. Just an idea.  At least that is ONE system, whereas we cant get every overseas retailer to collect GST and send it to the IRD. On the surface it seems relatively clean

 

 

Going though the banks is hard, what if I'm on an overseas trip and the money I spend is on goods/services consumed in another country.

 

Going through the retailers could work well - at least for the goods/services sold by those particular retailers.  If we are going this way then obviously it isn't all spending online, it would be all spending through certain major retailers like Amazon, Netflix, Apple, Android Play, etc.  Is some random Ebay seller going to collect GST for the NZ government?  I suspect not.

 

 

 

I buy from overseas for two main reasons:

 

1. I can't get the goods locally.  As in no one here has them for sale, they aren't imported by anyone and retailed here.  This is a very large chunk of my overseas spending.

 

2. Locally the prices are stupid!  Some things are so ridiculous, like over twice the price in many cases.  I bought a helmet that costs ~$650 here and the landed price from Germany was ~$350, I'd happily pay another 15% and still buy from overseas for this sort of price difference.  $350 + $52.50 = $402.50 which is still cheaper than $650 if my maths isn't failing me.

 

3. To avoid GST.  No wait, I said two reasons, not three.  I never buy from overseas for this reason.  If the NZ retailers were selling the same thing for only 15% more then I would buy locally.

 

Currently I'm looking at a hammock tarp from a cottage industry vendor in the US.  This isn't sold here.  Nothing remotely similar is sold here.  Nothing that will do the same job is sold here.  I either buy from overseas or not at all.  The seller will make the tarp in the fabric I choose once I've ordered it.  This is a person with no retail outlet, not a big store like Amazon.  So, how would the government expect to charge GST on a purchase like this?


 
 
 
 


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  Reply # 1902970 16-Nov-2017 21:17
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So if the service has to be consumed in NZ to be subject to GST, does that mean that I can claim a rebate on Netflix monthly payment if I watch it outside NZ for the month because I'm travelling?





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  Reply # 1902973 16-Nov-2017 21:33
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Geektastic: So if the service has to be consumed in NZ to be subject to GST, does that mean that I can claim a rebate on Netflix monthly payment if I watch it outside NZ for the month because I'm travelling?

 

I'll go with: sounds fair & reasonable, wont happen.

 

If you were overseas for 6 months and signed up for Netflix over there for that time then obviously you wouldn't expect to be charged GST by the NZ Govt.


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  Reply # 1902983 16-Nov-2017 22:03
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MarkH67:

 

Geektastic: So if the service has to be consumed in NZ to be subject to GST, does that mean that I can claim a rebate on Netflix monthly payment if I watch it outside NZ for the month because I'm travelling?

 

I'll go with: sounds fair & reasonable, wont happen.

 

If you were overseas for 6 months and signed up for Netflix over there for that time then obviously you wouldn't expect to be charged GST by the NZ Govt.

 

 


Ah, but unless I had bank accounts or credit cards in wherever I was for 6 months, would Netflix not prevent me from signing up anywhere other than NZ?






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  Reply # 1903069 17-Nov-2017 00:28
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Maybe they could just have a s̶u̶c̶k̶e̶r̶ honesty box system for those hell bent on virtue signalling via giving yet more of their hard earned to the government to buy the votes of those too lazy to work.





"War is an ugly thing, but not the ugliest of things. The decayed and degraded state of moral and patriotic feeling which thinks that nothing is worth war is much worse. The person who has nothing for which he is willing to fight, nothing which is more important than his own personal safety, is a miserable creature and has no chance of being free unless made and kept so by the exertions of better men than himself."
- John Stuart Mill


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  Reply # 1903081 17-Nov-2017 03:53
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Geektastic:

 

MarkH67:

 

Geektastic: So if the service has to be consumed in NZ to be subject to GST, does that mean that I can claim a rebate on Netflix monthly payment if I watch it outside NZ for the month because I'm travelling?

 

I'll go with: sounds fair & reasonable, wont happen.

 

If you were overseas for 6 months and signed up for Netflix over there for that time then obviously you wouldn't expect to be charged GST by the NZ Govt.

 

 


Ah, but unless I had bank accounts or credit cards in wherever I was for 6 months, would Netflix not prevent me from signing up anywhere other than NZ?

 

 

Your NZ Netflix wont work as you are not in NZ. Your US Netflix would if you were in the US, pay the US, nothing to do with NZ GST


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  Reply # 1903082 17-Nov-2017 03:58
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cadman:

 

Maybe they could just have a s̶u̶c̶k̶e̶r̶ honesty box system for those hell bent on virtue signalling via giving yet more of their hard earned to the government to buy the votes of those too lazy to work.

 

 

Unsure what this topic has to do with hard earned, government, buying votes, lazy to work.

 

GST is a tax on goods and services consumed in NZ. The vast majority of these goods and services are imported. Bunnings, Warehouse, and most of everything else. If you wish to import your own goods the same rules should apply. 

 

Your post indicates you wish GST to be removed for all goods and services. 


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  Reply # 1903086 17-Nov-2017 06:42
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tdgeek:

 

 

 

Your NZ Netflix wont work as you are not in NZ. Your US Netflix would if you were in the US, pay the US, nothing to do with NZ GST

 

 

Your Netflix subscription works worldwide. You can only access the content of the country you (or more accurately, your IP) is in.


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  Reply # 1903093 17-Nov-2017 07:33
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SirHumphreyAppleby:

 

tdgeek:

 

 

 

Your NZ Netflix wont work as you are not in NZ. Your US Netflix would if you were in the US, pay the US, nothing to do with NZ GST

 

 

Your Netflix subscription works worldwide. You can only access the content of the country you (or more accurately, your IP) is in.

 

 

So I can use my NZ Netflix account in the US for US content if I am there?


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  Reply # 1903098 17-Nov-2017 07:45
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The new Government Minister backflipped on this so called Amazon tax yesterday after a rebuke from the Finance Minister. Apparently they are seeking a report on it...but are running out of people to do reports!!


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  Reply # 1903099 17-Nov-2017 07:46
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MarkH67:

 

 

 

Yes, people shouldn't deliberately avoid tax, our government needs tax to pay for health, education, justice, social welfare, etc.

 

But how will it be done?  When I buy something from China for NZ$2.90 with free international shipping - will I now pay GST?  If so, then how?

 

 

If the government cut the de minimis value to $0 then yes you would have to pay GST. The logistics of it were detailed in the NZ post discussion paper on how they would impliment such a process. Assuming the package is handled by NZ Post they will collect the GST and estimate processing costs would be around $20 per item and unless legislation changes were made you'll also have to pay the existing MPI biosecurity charges and customs import fees of $50 so will be paying $70 in fees so the government can collect their 44c in GST.

 

Of course MPI biosecurity costs would have to drop if every item is charged for as they'll be able to recover their revenue from a lot more people. Assuming both charges were slashed from $50 to $20 it's still going to be steep.

 

The fact NZ post extimate handling costs of $20 to recover 44c shows the fundamental flaws in trying to collect tax if you scrap the de minimis exemption entirely.

 

 

 

 


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  Reply # 1903118 17-Nov-2017 08:35
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Aredwood: Be careful what you wish for. As the easiest way of avoiding a capital gains tax is to not sell any houses. In other words people will only sell their houses if they have to. A CGT might actually cause house prices to increase. As less people selling means less houses available, therefore prices rise due to lower supply.

 

I'm not interested in a CGT to control house prices.

 

Rather , to equalise the tax burden between those who pay too little tax and those who pay too much tax and to lessen the relevance of how something is taxed when making investment decisions.    My main concern with a comprehensive CGT is extra bureaucracy and introduced inefficiency. 

 

But I've gone off topic so no more on this from me!!!

 

 


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  Reply # 1903120 17-Nov-2017 08:41
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sbiddle:

 

MarkH67:

 

 

 

Yes, people shouldn't deliberately avoid tax, our government needs tax to pay for health, education, justice, social welfare, etc.

 

But how will it be done?  When I buy something from China for NZ$2.90 with free international shipping - will I now pay GST?  If so, then how?

 

 

If the government cut the de minimis value to $0 then yes you would have to pay GST. The logistics of it were detailed in the NZ post discussion paper on how they would impliment such a process. Assuming the package is handled by NZ Post they will collect the GST and estimate processing costs would be around $20 per item and unless legislation changes were made you'll also have to pay the existing MPI biosecurity charges and customs import fees of $50 so will be paying $70 in fees so the government can collect their 44c in GST.

 

Of course MPI biosecurity costs would have to drop if every item is charged for as they'll be able to recover their revenue from a lot more people. Assuming both charges were slashed from $50 to $20 it's still going to be steep.

 

The fact NZ post extimate handling costs of $20 to recover 44c shows the fundamental flaws in trying to collect tax if you scrap the de minimis exemption entirely.

 

 

Which is why I will end up buying MORE from overseas. If I have to pay those kinds of fees I will deal with people who are willing to ship only when the order is complete.

 

I will also be ordering significantly more stuff so that I can hock the extra off on Trademe and recoup MY costs. It may even be worth setting up a "Buyers Club" locally so multiple people can get stuff shipped in and the costs spread. We already do this in a ad hoc way for people at work who are uneasy about brings stuff in from overseas. Formalising the arrangement could easily see up bring in 5-10 times the amount we already do. And the nice thing is, if we bulk buy the discounts we may get will help offset the taxes anyway.

 

I will be REALLY interested in how they are going to handle birthday and Xmas gifts, no government is going to want to look like the Grinch at Xmas time.

 

I believe this is going to follow the "law of unexpected consequences" and retailers will be worse off.

 

 


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  Reply # 1903124 17-Nov-2017 08:55
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surfisup1000:

 

Aredwood: Be careful what you wish for. As the easiest way of avoiding a capital gains tax is to not sell any houses. In other words people will only sell their houses if they have to. A CGT might actually cause house prices to increase. As less people selling means less houses available, therefore prices rise due to lower supply.

 

I'm not interested in a CGT to control house prices.

 

Rather , to equalise the tax burden between those who pay too little tax and those who pay too much tax and to lessen the relevance of how something is taxed when making investment decisions.    My main concern with a comprehensive CGT is extra bureaucracy and introduced inefficiency. 

 

But I've gone off topic so no more on this from me!!!

 

 

If thats your rationale then I would like to see some other taxes

 

A house with 8 people in it can be paying the same council rates as a house with one person in it even though they use more resources. Not all councils have water meters.

 

A roading tax on all cars driving in the city, why should people who walk be paying for roads ? Not all cities have a fuel surcharge.

 

Artwork, jewellery , collectables, etc etc they can all have capital gains, hope you want to tax them too.

 

How about Apple having done $4 Billion with of business in NZ and payed $0 taxes because they paid them in Australia, how does that help NZ ?

 

Why should the private home be exempt from a CGT? And why should the private home be exempt from insulation standards, heating standards and the new WOF for rentals when it comes in ?

 

Can of worms well and truely opened.


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