Soon You Will Pay Import Taxes On All Small Parcels

3-minute read

You might soon have to pay GST on all the goods you buy online, not just purchases of digital goods including music, software and films and TV shows.

The government is looking at Amazon and – this is in Australia, anyway – this is actually been called the Amazon tax. They’ve said that they are going to look at a way of collecting taxes for not only digital goods, which came into effect here in New Zealand from October 1st.

Here is the interview with Peter Griffin (founding manager of the Science Media Centre and the founder and editor of Sciblogs).

It was called the Netflix tax, so anything digital, you’re getting charged your GST on. This is on physical goods as well, isn’t it? And this is for businesses that are selling over AU $75,000 per annum in Australia.

That’s right. They’ll have to register if they’re doing that much business in Australia, but importantly, it’s for very minor goods that we buy, or the Australians will be buying, under $1,000, under that threshold that currently exists.

So this is the bit that New Zealand with our online digital tax, the government went, “It’s too hard. It’s too complicated, too much compliance to try and extend that to physical goods that we’re buying online and shipping in.” The Australians are saying, “From the middle of next year, we’re actually going to do that.”

So I think that will probably trigger it happening here in New Zealand. They’ll look at how it was implemented in Australia and implement here. And that would mean for products under $400, GST would be required to be added to that when you buy it at a store, maybe on Amazon or somewhere else. Currently, the threshold in New Zealand $400.

Under $400, the customs aren’t worried about it. But there’s a lot of products coming in that are being bought off stores that are under that amount, so all of those merchants will have to then start charging GST. And that could be hundreds of companies that are subject to that.

If you’re not selling more than $75,000 worth of goods, and you are selling items to the consumer, there’s still a loophole potentially there because they’re going to be collecting it from the retailer, i.e. the vendor, and then they won’t change their border protocols. They’ll still be looking for items over $1,000. So there’s still a little bit of wiggle room in there.

Yeah. And I suppose the implications for us – if you’re a New Zealand company shipping stuff to Australia – and there are a lot of companies doing that, there’s a lot of trade across the Tasman – that will have an implication. You’ll be having to add tax sending stuff to Australia because the Australian government will be collecting that tax off the merchant.

And with the likes of Amazon coming into the market across the Tasman, potentially, in the next couple of years that will apply to all of that stuff that’s shipped to New Zealand as well.

Source: Radio NZ

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