Amazon purchases and new GST Rules

[woodPixel]

I see something deeply sinister in all this.

Ians post #96 (http://www.woodworkforums.com/f43/amazon-purchases-gst-rules-221567-post2090273#post2090273) and BobLs #99 (http://www.woodworkforums.com/f43/amazon-purchases-gst-rules-221567-post2090312#post2090312) aren't too far off the mark.

Dark, dark, days are ahead with debt. The governments of the world will do absolutely anything and everything to keep their own ponzis alive. This is but one part of it. People have no conception how much debt is held now - it is utterly staggering.

Import GST and trade imposts are the beginning of an attempt to collapse imports to correct balance of trade and manage currency exchanges. People are incorrect to think this is simply the government levelling the playing field on taxes. It doesn't take too much imagination to see how "handling fees" or other punitive levies and go-slow tactics will be added to items from China (?) or other "unfair" trading countries....

[ian]

Ian, I take it by "micro-businesses" you mean those under $75k turnover? GST is completely irrelevant for businesses larger than that because they claim back what they paid after they charge for their own product or service. However, for a <$75k the GST is a totally added cost that is not redeemable.
Yes, I'm thinking about those "businesses" that effectively operate from the kitchen table and have one employee (the owner).

around the time this thread started there was a side bar about one such business that the Amazon change would put "out of business" because the owner would no longer be able to source the goods sold by the business.

[ian]

If the government was really serious about GST avoidance they'd be doing something about the black economy. The introduction of the GST was supposed to wipe out the black economy - what a joke! It actually made it a whole lot easier and more attractive space to work in. The only reason you don't hear Gerry Harvey bleating about it is because the people who do operate there aren't his direct competitors. So, like everything else, it all comes down to self interest.
I hear that there's a proposal to withdraw the $50 and $100 notes from circulation to counter the black economy.
The thought being that paying more than a few hundred dollars with $20s is impractical.

[ian]

I see something deeply sinister in all this.

Import GST and trade imposts are the beginning of an attempt to collapse imports to correct balance of trade and manage currency exchanges. People are incorrect to think this is simply the government levelling the playing field on taxes. It doesn't take too much imagination to see how "handling fees" or other punitive levies and go-slow tactics will be added to items from China (?) or other "unfair" trading countries....
ah com'on.

It's only Trump that is using the War of 1812 to justify trade sanctions against Canadian Aluminium.

[woodPixel]

ah com'on.

It's only Trump that is using the War of 1812 to justify trade sanctions against Canadian Aluminium.

You Canadians burnt thier collective psyche deeply with that one.

They aren't letting it go :D:D:D:D

Sneaky Canadians! :wink:

[Beardy]

If the government was really serious about GST avoidance they'd be doing something about the black economy. The introduction of the GST was supposed to wipe out the black economy - what a joke! It actually made it a whole lot easier and more attractive space to work in. The only reason you don't hear Gerry Harvey bleating about it is because the people who do operate there aren't his direct competitors. So, like everything else, it all comes down to self interest.

I thought the GST did address the black economy pretty well?
Sure there might be a discount for cash for a service of some description here and there but the vendor with the cash usually uses the money to purchase goods or services of some description so GST revenue gets generated again........so in the circle of the transactions the government misses out on a drink here and there but gets plenty of sips along the way whereas pre GST they got nothing

[ian]

You Canadians burnt thier collective psyche deeply with that one.

They aren't letting it go :D:D:D:D

Sneaky Canadians! :wink:'cept it were British Regiments.
Years ago I knew a bloke who had served in one of the British regiments involved. Apparently this regiment delights in inviting visiting US officers to the Mess and seating them on cushions and serving them using plates and cutlery looted from the White House in 1814.

[woodPixel]

Good news everybody: https://www.gizmodo.com.au/2018/06/amazon-prime-is-finally-in-australia-heres-what-youll-get/

Makes it all a bit more palatable :)

(oh, the pun!!!)

[barri]

That is good news but you have to use Aussie Amazon where the prices are ridiculous. Microjig's Grripper, for example, is $115 at Carbatec and an unbelievable $342 at AU Amazon and $98 delivered to Australia from US Amazon. This is really shattering for me. All my saw blades, table saw accessories, router bits etc etc etc have been bought from Amazon US at substantially cheaper prices than you can get here. The only minor negative is that you have to wait about 9 days to get it. No big deal.

On a side note the CBA sent me an email that all bank issued Amex cards would be cancelled by November. Why, I don't know but most of those Amazon purchases have been made using an Amex card which gets me triple points and is easier to use overseas in some situations. So I am p..... off with all of this

[ian]

In terms of non compliance by overseas entities, it appears that the ATO might get very serious. (From a PWC explanatory note https://www.pwc.com.au/tax/taxtalk/assets/alerts/gst-import-low-value-goods-commence-july-29mar18.pdf)

The ATO has already commenced compliance activities for the inbound intangibles measures introduced in July 2017, and has issued assessments in instances of non-compliance. We would expect the ATO will take a similar approach in relation to the low value goods measures.
The ATO has also clearly stated it will use all available powers to ensure compliance (in cases where their initial education / communication strategies fail) and this may include:
 Raising default assessments.
 Seeking judgment against taxpayers to get the matter into the public domain.
 Writing to other tax authorities or other regulators regarding non-compliance in Australia.
 Garnisheeing payments from Australia.
 Geo-blocking the website; and
 Seizing assets held in Australia.

could be fun and games down the track.

[Beardy]

That all sounds great with their tough talk but that only works if they have a legal presence in Australia
Good luck chasing down an O/S company and garnishing their accounts

[ian]

The phrase PWC used was garnisheeing payments from Australia.
The "fun and games" might include billing your credit card for GST owed by an overseas supplier.

[Beardy]

The phrase PWC used was garnisheeing payments from Australia.
The "fun and games" might include billing your credit card for GST owed by an overseas supplier.

But if the O/S vendor has already charged you GST the ATO debt lies with them not the purchaser.

The point above that one, “writing a letter to other tax authorities” probably shows how little authority they have O/S

[woodPixel]

The point above that one, “writing a letter to other tax authorities” probably shows how little authority they have O/S

Perhaps the letter will be very sternly worded....

[ian]

But if the O/S vendor has already charged you GST the ATO debt lies with them not the purchaser. not necessarily.
I'm not sure who apart from the ATO knows the full extent of the powers they wield. Nor do we really know what data they get from our banks and credit card providers.
it's not inconceivable that GST owed by a foreign supplier in respect to an order you placed 12 months ago might be added to your current order with the same supplier. That could be construed as "garnisheeing payments from Australia" -- which is a very broad term

[q9]

all sounds like it is going to be very expensive to administer, enforce and collect. Let's see if this lasts more than 2 years.

Sent from my MI 5s using Tapatalk

[FenceFurniture]

It's a 3 year trial apparently.

[q9]

It's a 3 year trial apparently.like I said, let's see if lasts more than 2...

I suspect it will suffer massive cost blowouts, and other more important compliance issues will suffer. But I suppose that could be the entire point.

Sent from my MI 5s using Tapatalk

[Bushmiller]

I believe most of the above is related to new goods and companies. How will the proposals be applied to private individuals and second hand goods, and in particular where there are multiple suppliers?

Regards
Paul

[FenceFurniture]

Yeah, I nearly added, "but let's see how long...."

I'm absolutely certain the various Govt players have no idea what they have bitten off to chew, and it wouldn't surprise me if it was clobbered in 6 months. Of course I'm assuming there that there is someone of rank who is half smart in one of those departments, who can also make themselves heard.

[Bob38S]

It's a 3 year trial apparently.

Seems a long time before it’s found guilty.

We can only hope that common sense will prevail, wait a moment, we are dealing with politicians and bureaucrats, therefore the sense won’t be common...

[A Duke]

Seems a long time before it’s found guilty.

We can only hope that common sense will prevail, wait a moment, we are dealing with politicians and bureaucrats, therefore the sense won’t be common...

,
The Common denominator is Just lower

[woodPixel]

If it costs 6 times more to administer than taxes collected... Guess who pays!

Yanks have a good word for it.... "Boondoggle".

[Gedc]

Seeing this arriving on the shores of NZ in the next 12 months there is still significant uncertainty this side of the ditch re how / when / the cost of implementing it. Re Price Gouging and hiding behind GST etc - I'm still trying to figure out ( and awaiting an email explanation ) from a store that populates both sides of the ditch. I'l'll leave the name out as I'm more curious than accusative. It appears in buying it local, the list price compared to OZ has collected major margin shifts. My latest soon to be made purchase was for a JET 1200DC Canister setup for my new - long saved for home shop. The price here is approx $1650...Price in OZ is roughly $1060 NZ once converted. That's a whopping 61% difference in price for same product ( allowing for 5% GST difference..let's say 55% more ). I'm still not sure if the guy in NZ buys from OZ Parent company, ships it here, then adds a chunk or if he gets it the same price as OZ and a few containers stay on the ship and drop it off here. Either way I am still feeling like my hard cash is being sucked out of the wallet faster than I can make it. I shouldn't be able to purchase this in the UK from a retailer ( bricks and mortar), pay hundreds in shipping, pay GST, pay other customs fees etc and still be significantly better off than buying local from a specialist who I assume has a lot more buying power than me.

[Chris Parks]

I've just looked through as much of the ATO (https://www.ato.gov.au/Business/International-tax-for-business/GST-on-low-value-imported-goods/When-to-charge-GST/) and Home Affairs (https://www.homeaffairs.gov.au/busi/cargo-support-trade-and-goods/importing-goods/duty-rates-and-taxes/low-) websites as I can stand for one session, and I've seen no mention of $300 whatsoever. No mention of $50 either.

However, what does stand out time and time again is that if the goods are >$1000 then the GST (and any applicable Import Duty) will be charged at the border, just the same as it currently is. That is to say that the retailer/freight forwarder etc DOES NOT charge the GST and forward to the Govt, but the receiver will be sent a First Notice by Aust Post, pay the GST and Duty, and then the goods will be released by AP for delivery.

What is not clear, or even mentioned by those sites, is what happens when purchasing from a retailer who DOES NOT sell more than $75,000 pa to Australia and who is sending a package that is less than $1000. Apart from eBay, Amazon, Lee Valley and perhaps a few dozen others, this will include a helluva a lot of retailers who are sending stuff here.

I can see giant cock ups coming out of this. For example, I have dealt extensively with Shipito over the years. Trying to get them to understand anything more complex than 2 + 2 = 4 is virtually impossible. I can just see them saying that GST has to be paid to them for ALL parcels, inc those >$1000. That will mean that Home Affairs will also demand GST upon arrival, the customer will have to claim the first GST back from Shipito, who in turn will deduct it from their next GST return to the Aust Govt.

Yeah right. That should go very smoothly indeed. Shipito are masters of hiding behind private agreements. For example they say Knives can't be carried by TNT, but TNT Australia says that's OK. Shipito then says "our agreement with the agent here says no". Same deal with wooden items or parts coming via Aust.Post.

AP or someone has to store all this stuff while the paper work is done and the money confirmed as being paid. The system is that in the IMC (International Mail Centre at Clyde) all receipts from OS are put into AP specific wire cages called ULD's (unit loading devices) or simply a wire cage that gets forked onto a truck and then run through Sydney Parcel Centre. I will bet money that AP do not have enough ULD's to hold the parcels and nowhere near enough wharehouse space even if the do have the cages. The ramifications on the AP transport and delivery network are going to be huge and yet to be seen. The small packets delivered by the posties on bikes is going to be very interesting.

Have you all worked out what this is really about? It is simply to make one man wealthier than what he already is, nothing more and nothing less.

[Bushmiller]

Shipito are masters of hiding behind private agreements. For example they say Knives can't be carried by TNT, but TNT Australia says that's OK. Shipito then says "our agreement with the agent here says no". Same deal with wooden items or parts coming via Aust.Post.

Brett

I contacted Australia Post over the wooden items issue and they said there was no problem at all. I then went back to Shipito and confronted them. They said it was the carrier at the US end who would not ship timber. That was too much for me and I terminated my arrangement with them shortly after that explanation.

Regards
Paul

[FenceFurniture]

http://www.woodworkforums.com/f43/usa-freight-forwarders-222034#post2093147

[ian]

I've just posted this in the other thread dealing with overseas purchases after 1 July 2018

I've just received notice in one of my news feeds that the US Supreme Court has overturned a ruling dating from the early 1990s dealing with the collection of state sales taxes in the US. Up till now, goods purchased on-line, or by phone, from a retailer located in New York (Lee Valley for example) and shipped to a customer in (say) Florida have been sales tax free. No more.
I haven't read the ruling in detail, so can't advise if the sales tax will be collected on behalf of the sate where the sale takes place or the state where the goods are delivered.
This sales tax will apply to all US based retailers, so complexity wise, collecting Australian GST will not be a biggie.

Of note, the US Lie Nielsen website already contains a field for "tax" and if I order an item for delivery into Canada, the applicable provincial GST is added at checkout.


So maybe, the US Supreme Court has saved Gerry's bacon.

[andyful]

me too!

[FenceFurniture]

Backflipped:
https://www.abc.net.au/news/2018-11-22/amazon-backflips-on-decision-to-block-australians-from-shipping/10520900

[crowie]

Backflipped:
https://www.abc.net.au/news/2018-11-22/amazon-backflips-on-decision-to-block-australians-from-shipping/10520900

That's good news thank you Brett...
The Amazon USA website prices and range was always great especially on things that weren't available here.
Cheers, Peter

[poundy]

just a warning - they haven't backflipped completely, it's still only first party stocked product, not third party, so you don't have the full access (yet)

[woodPixel]

No, not completely. The shipping charges for the three remaining items in my cart was USD$59.

Seems they are making the shipping a *tad* more expensive.....

....

Overall Im not sure of anything any more. Amazon, after all, is just a reseller and logistics company. Admittedly they are doing an amazing job. I was on the lookout for some washing sauce for the new front loading washing machine (amazing!) and BigW are very competitive with their household products, especially bulk.

Makes me wonder what Woolworths et al are planning on the home-delivery-logistics front in the coming months. Being the "fresh food people" they still sell 90% of their products in cans and boxes. Being a store is convenient for eggs, but unnecessary for TP/powder/soap/cereal, etc, etc.....

[LanceC]

No, not completely. The shipping charges for the three remaining items in my cart was USD$59.

Seems they are making the shipping a *tad* more expensive.....


I signed up for prime before they stopped shipping to AU, as it offered free shipping, and despite the monthly charge, it ended up significantly cheaper, even when only ordering every three months or so. I wonder if this is still the same under the recent changes.

[Beardy]

So what happens with the AU store? It is not going to get a lot of traction when you can still access the US site is it?

[woodPixel]

I suspect the deal internally is quite simple: any orders from the US are handled in AU (if have stock, ship from here), if not then do it internally.

However, I've been watching them closely and can guarantee its to disrupt the AU pricing downwards. Suppliers here have attempted to treat Amazon as simply a bulk merchant, such as they would MetCash. By "accepting defeat" and opening AU orders to the US site, this is a simple method to hammer/anvil blow local suppliers downwards.

Secondly, If you look around the site, you'll see huge price discrepancies between the AU site and US. This is due to the vast number of sellers simply using AU like eBay (i.e a sales front, or "logistics partner"). The manufacturers haven't jumped in (exceptions are J&J, Unilever, etc, which already bulk-ship direct to them).

This will destroy the perverse "businesses" that have sprung up selling OS stocks locally at ludicrous markups. These rent-seekers model is simple. They put an item on AU at 3X the cost, get their US cousin/sister/uncle to daily ship from the US and redirect/relabel when it arrives. This ticket-clipping type business is exactly what Amazon sought to destroy.... so hence the move.

The Amazon model is the oldest internet business there is: Disintermediation.

Now AU has all the local search stats for a full year, they will bulk import everything in the top 10% requests and let the ants fight over the profitless scraps.