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'Amazon Tax' to be introduced in October 2019

Home Forums General Discussion News 'Amazon Tax' to be introduced in October 2019

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  • #27971
    Eddieb
    Keymaster
    • Bike: Suzuki DR650 ADV
    • Rank: Round the World Adventure Globetrotter

    The so called ‘Amazon Tax’ to address how online overseas purchases under $1000NZ have not been liable for NZ GST on importation in New Zealand is to be put in place as of October 2019.

    From: https://www.stuff.co.nz/business/industries/107929221/taxfree-internet-shopping-to-end-next-october

    I note a couple of interesting points that mean this may not effect us, or if it does it’s in a positive way.

    duty and biosecurity fees on imports worth between about $225 and $1000 being abolished.
    This should actually make some items cheaper to import than they have been to date.

    Only foreign companies that sell less than $60,000 worth of goods to New Zealanders over a 12 month period will be exempted from having to comply with the new regime, and GST won’t be payable on items bought from them.
    I imagine most adventure riding accessory manufacturers and distributors of products that we can’t otherwise buy in NZ wouldn’t ship $60K worth of products to NZ in a year.
    The cheap chinese online markets like Aliexpress and Wish.com will be impacted, but dedicated ADV suppliers probably won’t.

    GST will go on internet shopping purchases from overseas from October next year, the Government has confirmed.

    Announcing details of the new regime, Revenue Minister Stuart Nash said large foreign companies would be required to levy GST on all goods they shipped to New Zealanders valued at $1000 or less.

    Nash said the move was conservatively expected to raise $112 million annually within three years, on the assumption that by then about three-quarters of goods people bought online would be from suppliers that complied.

    The new rules will change the situation under which most goods valued at less than $400 including shipping can be bought from overseas websites tax-free. Lower tax-free thresholds currently apply to goods that attract duty.

    Customs will remain responsible for collecting GST and duty on goods worth more than $1000, from consumers.

    Only foreign companies that sell less than $60,000 worth of goods to New Zealanders over a 12 month period will be exempted from having to comply with the new regime, and GST won’t be payable on items bought from them.

    Nash said that was in keeping with the fact that local firms with an annual turnover of less than $60,000 also don’t have to charge GST.

    Australia became the first country to require foreign firms to collect GST on physical items they shipped direct to consumers from overseas in July.

    Nash believed that compliance by foreign firms there was less than 50 per cent, but he said it was early days and all the major marketplaces and companies had “signed up”.

    The New Zealand Government’s decision to follow suit with Australia follows pressure from Kiwi retailers which have argued they have had to compete on an uneven playing field.

    Nash said he did not believe the tax change would have a major impact on New Zealanders shopping online “but it is about understanding the reality of the 21st century marketplace.”

    There were about 26,000 small retail businesses in New Zealand that employed more than 62,000 people, he said.

    “Many are in competition with foreign firms which sell exactly the same product into our market without collecting GST.

    “With the steady growth in online shopping from offshore suppliers, a significant amount of tax revenue is being lost. Mostly though, it’s a matter of fairness so the sooner we get this in place the better,” he said.

    There is a small silver-lining for consumers, with duty and biosecurity fees on imports worth between about $225 and $1000 being abolished.

    That will make some imports valued at up to $1000 that still attract duty, such as clothes and shoes, up to about $150 cheaper. Nash said it would also remove hassles for people who might previously have had to go to the trouble of getting items worth less than $1000 released by Customs.

    The new regime will also apply to online marketplaces, and Nash said Trade Me would have to comply by levying GST on items sold to New Zealanders by overseas traders through its platform.

    “The concern if you didn’t register Trade Me is that overseas suppliers would end up just putting there stuff up on Trade Me. The tax systems has to be about fairness and integrity.”

    Nash said it would always be difficult to get to “100 per cent compliance” by overseas firms but Inland Revenue did have “ways and mean to enforce this”.

    “We will start off in a helpful mode, so if companies aren’t complying will inform them.”

    If that “softly-softly consultation process” didn’t work, it would take more steps, mainly taking advantage of the mechanisms provided for through the country’s double tax agreements, he said.

    HOW PRICES WILL CHANGE

    $50 T-shirt bought online from overseas

    Now: Costs $50.

    After: Will cost $57.50 with GST added by supplier

    $300 jacket bought from overseas

    Now: Costs $432.17, with duty, GST and border security fee paid by consumer

    After: Will cost $345, with GST paid by supplier, but duty and border security fee abolished

    $600 phone

    Now: $742.67 with GST, duty and border control fee paid by consumer

    After: Will cost $690, with GST paid by supplier, but duty and border security fee abolished.

    #27979
    Jake Maryniak
    Participant
    • Rank: 400cc Rider

    My only issue with this is that already there is a growing number of online retailers that won’t send goods to NZ, it is going to get worse when this comes in. And I mean goods that you can’t buy in NZ, not the ones that are directly competing. Revzilla already won’t send goods here, Amazon is the same, Touratech Germany has informed me to go via NZ distributor, yet there is fuck all on NZ website and prices are outrageous.

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