New customs fees on goods imported to NZ

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Master Geek
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#340983 12-Jun-2010 17:35

well with the world switching to ebooks, game downloads, tv show downloads(not in nz yet), i think customs needs some more cash so this is why I think their making these changes.

Kyanar

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#341000 12-Jun-2010 18:30

markh14: well with the world switching to ebooks, game downloads, tv show downloads(not in nz yet), i think customs needs some more cash so this is why I think their making these changes.

Absolutely not. Imported digital products the government has even less business charging GST on, as they don't even impose burden on customs. Thankfully, the OECD agrees with me there and has decreed that digital downloads are technically services not products, so the government can't charge GST on them.

Flip side though, is that NZ businesses selling software through companies like Regnow are actually liable for GST if a NZ purchaser buys it, and let me tell you it is near impossible to work out the GST component of "30 USD" when the payment is made in the form of a giant lump sum. I had to use historical exchange rates and probably still got it wrong.

richms

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#341110 13-Jun-2010 02:27

old3eyes:
Regs:

savings also do not incur GST - a big win there for people who like to save to buy a house.

True but they put tax on your savings though and I believe it just went up.

They have put tax rates down, which has made teh usual poor whingers upset that they get less of a cut $ wise than others.

The various PAYE rates, investment, interest etc rates all work out when you do your tax return at the end of the financial year.

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chrissie

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#341206 13-Jun-2010 13:55

I buy tennis racquets on Ebay, but because shipping is so expensive ($55 per racquet), I get them sent to a friend in the States first and he then forwards them to me in bulk, which saves me quite a lot.

Customs insists I pay GST on the shipping from each seller to my friend as well as the international freight!!

I've made an online complaint to the Ombudsman about it, so we'll see what happens.

By the way, I'm just a hobbyist and I don't sell the racquets, just collect them. I have nearly 500!

CC

Kyanar

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#341211 13-Jun-2010 14:07

chrissie: I buy tennis racquets on Ebay, but because shipping is so expensive ($55 per racquet), I get them sent to a friend in the States first and he then forwards them to me in bulk, which saves me quite a lot.

Customs insists I pay GST on the shipping from each seller to my friend as well as the international freight!!

That's an absolute rort. Because no part of the service is provided in New Zealand, and freight is a service not a good, they cannot legally charge GST on it - I believe GST is chargeable on freight into the country as part of the service is physically performed here. You should put in a call to Fair Go or Target or something. With the new changes, I bet it'll be high profile enough to get some show time.

chrissie

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#341219 13-Jun-2010 14:45

If I get nowhere with the Ombudsman, that's what I intend to do.

Apparently when you submit a complaint, they assess your chances of success and then consult with the agency you're complaining about, to get their side of the story.

Since I've already had about a dozen emails back and forth with NZ Customs, I doubt they will change their stance and so we'll just go through the whole rigmarole again.

According to the legislation, GST is charged on the amount paid or payable "to or for the benefit of the seller" plus international freight. Since international freight is mentioned separately, it's not considered part of the transaction (or customs) value, so they are clearly wrong in including the domestic freight within the USA, as part of the transaction value.

The guy I was mainly dealing with said that I was taking the words "to or for the benefit of the seller" out of context and that it really meant "to the seller, or for the benefit of the seller".

Clearly linguistic gymnastics to suit his (wrong) interpretation of the legislation.

If it was intended that way, it would have said so, right? Duh!

sbiddle

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#341227 13-Jun-2010 14:54

Kyanar:
The idea that we should have to pay GST on imports at all is just a form of protectionism. You know what would stop people importing so much stuff? If the local prices weren't bloody ridiculously high.

One could argue that GST on goods for personal use is just that. For business use it's a totally different issue. GST paid by a business is cancelled out when GST is charged on those goods that are resold. If a company didn't pay GST on those goods there would be a significant exploit in the system.

There is no way to assess whether imported goods are for personal or business use (ie being resold) so the fairest way is to charge GST on all goods. If personal goods were not subject to this businesses would simply rort the system.

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Kyanar

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#341273 13-Jun-2010 17:59

Customs is quite correct in that's how the excise is calculated. But, Customs doesn't have the authority to determine how much GST is due, that's Inland Revenue's job. And the Goods and Services Tax Act implies that only where a service is performed in New Zealand is it applicable. Domestic freight in the US is clearly no in New Zealand. Just contact the IRD and tell them to set Customs straight.

Also, sbiddle, quantity restrictions could do that. Customs already keeps tabs on who's importing, is it too much a stretch for their computer to tell them when Jim Bob imports 18 packages in a month and flag it as a bit odd?

bazzer

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#341410 14-Jun-2010 09:36

Kyanar: It's simple. Taxation is supposed to pay for services the government provides society. Road User Charges for road upkeep, ACC levies for healthcare, demerit taxes on cigarettes and alcohol for the increased burden on healthcare, GST for the consumer protection on private sales. Ideal world, anyway.

However, the government provides no services in an overseas transaction. It's allllll private business. Well, they provide customs services - but customs charges a levy to pay for that. Ergo, the New Zealand government is demanding money for nothing.

The idea that we should have to pay GST on imports at all is just a form of protectionism. You know what would stop people importing so much stuff? If the local prices weren't bloody ridiculously high.

What a simplistic view! GST for consumer protection? It's simply a part of the Goverment's tax system. "GST is a tax on most goods and services in New Zealand, most imported goods, and certain imported services."

What does income tax pay for? I don't really think it's fair that I pay income tax on worldwide income, but that's the way it goes.

The amount and structure of the tax system is not going to be fair to everyone, but life's not fair.

Satch

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#341471 14-Jun-2010 12:10

My package just arrived, no duty due on it. I've checked the box over and see no value stated whatsoever. Not even a shipping value was listed. In fact the description on the label on the (Amazon branded) box says Unknown - New (Count 1).

So now I have no idea how all this works...

chrissie

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Master Geek

#341474 14-Jun-2010 12:14

If no value is declared, Customs makes a guesstimate. If it the parcel was from Amazon, they'd assume it was a book or books with a total value of no more than $400 including freight.

Satch

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#341479 14-Jun-2010 12:25

chrissie: If no value is declared, Customs makes a guesstimate. If it the parcel was from Amazon, they'd assume it was a book or books with a total value of no more than $400 including freight.

Loophole....

Bung

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#341507 14-Jun-2010 13:37

chrissie: If no value is declared, Customs makes a guesstimate. If it the parcel was from Amazon, they'd assume it was a book or books with a total value of no more than $400 including freight.

Is there much assumption these days. All incoming mail is x rayed, wouldn't courier packs get same treatment? They'd know whether it was a book.

Satch

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#341508 14-Jun-2010 13:40

Bung:
chrissie: If no value is declared, Customs makes a guesstimate. If it the parcel was from Amazon, they'd assume it was a book or books with a total value of no more than $400 including freight.

Is there much assumption these days. All incoming mail is x rayed, wouldn't courier packs get same treatment? They'd know whether it was a book.

I would imagine that they would be focussing on the bad stuff rather than trying to identify all objects in all packages. Too costly otherwise...

Geese

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#343222 19-Jun-2010 11:27

I am looking at making a purchase off Ebay for some footwear from the USA, as it seems nobody in NZ sells these shoes in my size (McMassive).

The shipping is almost double the cost of the shoes, even so, its still half the price they would be purchased in NZ. However if multiple items are sent in same parcel, shipping cost only goes up a token amount. So I thought best option was to buy 3 pairs to bring the cost per unit from $93 down to $58 each.

Here are my calculations, can anyone see a problem with them which may result in me getting a "bill shock" from Customs?

Footwear is 10% duty (?)

$75 USD for 3 pairs of shoes, and $48 USD shipping.

Convert to NZD is approx $108 and $68.

Duty 10% of $108 is $10.80.

Add duty and freight to shoe price is $186.80

Thus GST payable value $23.35.

Add GST to duty = $34.15 (does not exceed $50 minimum).

I might get away with it?

Only because value of shoes themselves is so low.

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