New GST Rules - coming into effect 1st December 2019
It’s a scary world out there, and in a digital age sometimes it’s hard to figure out who to trust. Never fear, as we have the lowdown on the latest legislation to hit the web, and we’re here to break it down for you!
From the 1st of December, you can expect to see a 15% price increase on low value goods purchased from non-resident (overseas) suppliers. Previously, retailers based outside of New Zealand were not required to account for New Zealand GST on the sale of goods sent to New Zealand customers, and this was solely due to the fact that the goods purchased were not physically in the country at the time of sale. Now, thanks to the new legislation, these same retailers will have to account for New Zealand GST, which means an extra 15% charge will come into play for all goods valued individually at $1000.00 or less.
WHAT IMPACT DOES THIS HAVE ON ME?
Let’s break this down!
For example, the handbag you’ve fallen in love with is only $350.00 when purchased from a British retailer, but will be $350.00 + 15% from the 1st of December. This means that your handbag may now cost over $50.00 more. Is it then still worth the price?
If we take that same handbag and find that it’s still only $350.00 from the 1st of December, then it may be due to the fact that the supplier is either already registered for GST or they earn less than $60,000 a year from New Zealand shoppers. Both factors exclude the retailer from these new changes.
WHY IS THIS HAPPENING?
Where New Zealand businesses are required by law to pay GST, overseas retailers are currently not. This does not make for a level playing field, and does not offer a whole lot of transparency for New Zealand consumers. The introduction of these changes will likely mean that in most cases the price you pay for an item purchased through a non-resident supplier is now the actual, full price, so there are no nasty surprises when you’re required to pay additional amounts when the product finally lands in the country.
WILL THIS HAVE AN IMPACT ON PARALLEL IMPORTED’S PRICES?
Absolutely not! Parallel Imported is a New Zealand-based, GST registered company, so these new legislations will have no impact on our prices!