How Will The 'Netflix Tax' Affect Your Purchases?

jv hi fi on 15/06/2017 - 23:39

So it looks like the Netflix tax is coming in on July 1st, there has already been some discussion of its effects on eBay sellers in this post: https://www.ozbargain.com.au/node/310083. However, I'm interested to see how it will affect the purchases of consumers since all purchases bought overseas and most previously untaxed digital products will now have GST added.

The main area that will affect me are video games. I purchase quite a few console games from the UK online, probably 50/50 split between UK retail games and Australian retail games. The GST addition will make most of the differences in costs between UK games and AUS games quite negligible. I think I will be buying more AUS games as it's probably not worth it for Day 1 releases to wait an extra week. However, I reckon purchasing from overseas will still be advantageous for rare games and games that face significant delays in Australia (e.g. Nintendo Switch games). Also, Target and Big W are doing very well now with price competition for new games which is great.

I don't really use Netflix but I can see that the GST will be a significant hit to it (an extra month's subscription fee).

So how will it affect you?

General Discussion

Comments

  • [Deactivated] on 15/06/2017 - 23:48

    Crossing my fingers that Amazon competition will offset it :)

  • Diji1 on 15/06/2017 - 23:51
    +12

    The Australian population is brain dead for voting in the same party that bought in this shitty, unfair value added tax whilst lowering taxes on business and allowing massive tax evasion to occur by not changing tax codes.

    Literally half of them live paycheck to paycheck so they're screwed. It unfairly targets a large portion of the rest that is left. And yet here we are with Turnbull business as usual.

    • altitudinous on 16/06/2017 - 11:34
      • Consider that Australians voted in this government for other reasons. Perhaps this extra VAT wasn't the reason they voted in this government.
      • Australia is broke. They owe other countries and people $500 billion dollars. To dig itself out it is taxing more.
      • The government is lowering business taxes because other countries have far far lower business taxes. Businesses that are here already close down and move to another country because the taxes are lower there. When this happens, all the people that were employed by those businesses in Australia lose their job which is bad for everyone. People don't have jobs, People don't have money to spend so more businesses go broke, People don't earn money to pay taxes to the govt.
      • Yes many people live paycheck to paycheck. They won't have a paycheck at all if their employer moves overseas because of high business taxes.
      • pais on 16/06/2017 - 12:06
        +4

        Australia is broke.

        lol

        They owe other countries and people $500 billion dollars.

        We're a sovereign nation that issues its own currency… The bulk of our public debt is debt we owe to ourself, not other countries.

        What you've said literally makes no sense.

        • RockyRaccoon on 16/06/2017 - 16:32

          We're a sovereign nation that issues its own currency

          Sorry, Talking of making no sense.

          You really need to understand finance. Printing money doesnt solve debt issues.

          Sort of like saying

          I have a credit card, so I can spend all that I like…..

          Let alone your next statement

          The bulk of our public debt is debt we owe to ourself, not other countries

          No! Much of our debt (public and private) is from Overseas

          However the issue isn't debt its NET debt, how much we owe, less the value of assets we own and debt owed to us.

          So the real point is like a mortgage. You may owe a million dollars, but if the property you own is worth 2 mlliion, you are ok

          According to reports we arent broke (hence our AAA credit rating) as we have more than we owe.

          If you used this as your argument, your objection to altitudinous making no sense would be valid.

        • pais on 17/06/2017 - 00:08

          A sovereign government with a free floating currency cannot face a solvency crisis (i.e. Australia is absolutely not broke, and will not go broke). The way in which treasury operations work in Australia is that interest rates aren't subject to normal market forces; treasury can always choose not to drain reserves to hit an interest rate (i.e. an overnight cash rate of zero) and demand for the reserves are highly inelastic so the government can do as it pleases (though it maintains target interest rates to improve predictable/economic stability).

          This is by way of saying that a government can always fund its liabilities provided its denominated in its own currency (hint: in Australia, it is)… because it holds monopoly as currency issuer.

          So the real point is like a mortgage.

          Presumably you're not issuing and selling bonds denominated in your own currency, that you then use to purchase your home?

          Any time someone mentions "the economy is like a mortgage", I just cringe. Public debt is nothing like a credit card or mortgage. Please don't liken them. It's silly.

  • scrimshaw on 16/06/2017 - 02:17

    Won't affect me much, as I don't really use ebay for digital goods. Bought mostly tangible goods from big-name sellers like DWI or local retailers.

  • Wystri Warrick on 16/06/2017 - 02:40
    +2

    Will this affect AliExpress?

  • EightImmortals on 16/06/2017 - 07:41
    +4

    Dumbest move ever.
    If I buy a $5 T-shirt from Aliexpress how much will it cost government tax thieves to actually collect the 50c?
    HOW will they collect it anyway? Are they going to confiscate my goods at the local post office until I go down there and pay the ransom?
    Is diverting people's mail even legal?
    The GST is meant to be applied on goods and services bought within Australia so what jurisdiction does the 'Australian Government pty/ltd' have to apply their charges to foreign businesses?

    The whole thing stinks to high heaven. Surely there must be some retired barristers who could challenge this?

    • jv hi fi on 16/06/2017 - 22:39

      Yes, the whole process seems very unfeasible and unnecessarily costly, just so that it evens the competition between retail and international - I see the need to increase the competitive nature of Australian retail although this doesn't seem to be the best way to do it.

  • RockyRaccoon on 16/06/2017 - 08:20
    +1

    Are they going to confiscate my goods at the local post office until I go down there and pay the ransom?

    Is diverting people's mail even legal

    amateur lawyers should be banned from Ozbargain - unless of course that also is illegal

    • EightImmortals on 16/06/2017 - 08:48
      +1

      Which is why I asked a question and didn't start quoting the constitution. :)

      • RockyRaccoon on 16/06/2017 - 09:34

        Which was my way of saying "dumb" question but being nice about it. 😀

        The post office IS part of Australia post. Mail is diverted there all the time. To even think that is illegal requires a VERY long bow

        Going your way, you could even claim putting it in mail contractors van could be diverting mail…. 🚚

        Hey it's all fun, nothing personal 🤹‍♀️

        • EightImmortals on 16/06/2017 - 11:59

          Fair enough, what I MEANT was that will they now refuse delivery unless I go to the post office and pay the tax or will they be collecting it in some other way? On foreign purchases I don't see how they force them to become tax collector like they do with local businesses?

        • RockyRaccoon on 16/06/2017 - 16:16
          +1

          @EightImmortals: They plan to collect it at the point of payment. Yea how they do that will be interesting, if the OS supplier refuses to do that. But these are rules made up by public servants who get paid so much they dont buy from OS, and anyway they will have jobs for their family and friends regardless of how much it costs to collect the 50c.

          A very simple strategy would have been to just reduce the allowance from $1000 to say $250 then see what impact it has on costs to collect, then make further adjustments later (up or down). But that takes some sort of intelligence, something the public service and their lackeys (The pollies) cant fathom.

  • ode1online on 16/06/2017 - 08:23
    +1

    I cant see how they can enforce it, they have effectively asked overseas companies to register with the ATO and collect the GST, its not Customs roll to check for compliance, that's the ATO's job. its insane.

    • jv hi fi on 16/06/2017 - 22:40

      Agreed, it's going to cost a lot and so much work to get this to work.

  • k-rokfm on 16/06/2017 - 08:35

    Yeah I can see sweet F/A businesses overseas actually doing this. In reality, unless the company is operating in Australia and selling from an overseas site then the ATO will have no legal enforcement over these businesses.

    I bet the ATO just went "wtf is this piece of turd" when it came across their desks from the government.

  • Ocker on 16/06/2017 - 08:37
    +6

    There seems to be a bit of misunderstanding about this "Netflix" Tax.

    Ebay has advised sellers that it (GST) applies to (only) the selling FEES they charge - NOT the purchase price of the underlying item. Even then they will only levy the GST to those that are not registered for GST - most EBay store owners will be registered for GST.

    For example, if we sell an item for $100, and our FVF (Final Valuation Fee) is $10.00 then Ebay will charge 10% GST on the $10.00 FVF amount - NOT the whole transaction.

    The 10% GST impost on all goods purchased overseas (currently applied to transactions over $1,000) was to be introduced on 1st Jusly but has now been postponed for another 12 months

    • ESEMCE on 16/06/2017 - 08:52

      15 years ago the 10% import duty used to apply to goods valued over $500 (including shipping and insurance costs). I got stung on this when my item value was only $450, but shipping and insurance pushed it just above the $500 limit… Back then I was not impressed!
      I don't know when it changed to $1000, but $500 item valuation seems fair (these days) and $50 seems worth more than the collection cost. Once you get below about $300/$30 tax, I would estimate you're approaching breakeven.

      I guess the concept of drop-shipping has spoiled a bit of a money party for the government as more retailers would be able to bypass the tax by dropshipping individual orders instead of importing a full container load to warehouse and sell locally.

      • lysp on 16/06/2017 - 17:06

        Not sure what the situation was 15 years ago, but with the $1000 limit only the value and not the shipping is taken into account for the limit.

        If you do go over the limit though, duty is counted on both.

        • 900 cost + 99 shipping = duty free
        • 999 cost + 800 shipping = duty free
        • 1000 cost + 900 shipping = duty on 1900
        • 1001 cost and free shipping = duty on 1001.
    • jv hi fi on 16/06/2017 - 22:35

      That's great to know it's been delayed, I haven't seen it in the news. Does that mean eBay is still charging sellers an extra 10% on their fees if the tax is delayed or if it's different story? I received an email from eBay yesterday advising of the price hike - if they haven't been paying GST before and still aren't after July 1st 2017, then that's just money grabbing.

  • EightImmortals on 16/06/2017 - 08:50
    +4

    "The 10% GST impost on all goods purchased overseas (currently applied to transactions over $1,000) was to be introduced on 1st Jusly but has now been postponed for another 12 months"

    Oh sweet!

  • twig on 16/06/2017 - 09:00

    Wasn't it stuck at proposal stage and hasn't been given the green light?

    • jv hi fi on 16/06/2017 - 22:36

      I thought it was going ahead since eBay sent their fee hike notices to all sellers? I did see on Lifehacker that it had apparently stalled but no ETA on when it comes in.

  • CyberMurning on 16/06/2017 - 10:06

    when there are huawei w1 for $88 again i dont mind paying high tax up to 25%

  • ItsMeAgro on 16/06/2017 - 10:32
    +7

    Can't believe they succeeded in getting their Harvey Norman tax to be called a "Netflix tax"…

    • Bystander on 16/06/2017 - 19:23
      +1

      Wasn't it Gerry Harvey + Solomon Lew who pushed hard for this?

  • SirFlibbled on 16/06/2017 - 14:45
    +2

    It wont change my spending at all. If I import from OS, it's because I save significantly more than 10%.

  • [Deactivated] on 19/06/2017 - 22:55

    its been delayed for another year!!!
    https://www.lifehacker.com.au/2017/06/the-netflix-tax-has-be…

Login or Join to leave a comment
Login Join