"Netflix tax" effective 1 July 2017

[trout]

eBay is Not "Double Dipping" with this tax charge the Government is.
When a seller buys the postage supplies at the post office He/she is charged 10% GST on them supplies.
eBay then has to charge a further 10% in GST (Harvey Norman Tax) on that same amount for the postage costs that the seller has already paid the GST on at the Post Office for.
In effect the seller is hit for two lots of GST for the one transaction = "Double Dipping" By the Tax Man.
This is the way I see this Bloody Tax working out and a private seller doesn't have the luxury of an ABN number to be able to recoup the GST charged by both the Post office AND eBay on behalf of the Tax Department :dash1:

Hobby sellers will be hit, yes, but hobby sellers do not have to pay GST on their gross profit, which businesses do.

In all seriousness "Hobby Sellers" or collectors very rarely make any "Profit" at all when they sell their collections, The vast majority of collectors normally LOOSE Money when selling their collections :angel:
In reality Dealers do NOT pay the GST because they can claim it back.
Yes they DO have to pay tax on their profits and that is the same as a collector that pays PAYG Tax on His/Her wages or Salary, Same difference really.
Everyone pays Tax on their earnings But This Harvey Norman Tax won't affect the Dealers only the amateur collectors will be hit with it which IMHO is a Bad thing and is something that can only have a detrimental effect as far as recruiting new collectors to the hobby is concerned as this is yet another expense added to the cost of the hobby.

[r9453]

but hobby sellers do not have to pay GST on their gross profit, which businesses do.

I thought GST is a goods and services tax not a profit tax. Businesses pay GST on their inputs which they deduct from the GST they collect for the govt.

[drakesterling]

but hobby sellers do not have to pay GST on their gross profit, which businesses do.

I thought GST is a goods and services tax not a profit tax. Businesses pay GST on their inputs which they deduct from the GST they collect for the govt.

GST is a Value Added Tax. It is charged on the Value Added (ie profit) to a product in a production process.

Businesses pay GST on their inputs, which they deduct from the GST they charge on sales and collect from customers. But if they sold the product for a profit, then the amount they claim back is less than the amount they collect. The net amount they send to the tax office in GST is 10% of the profit on the item.

I wrote above that GST is paid on the gross profit. Actually, because the GST paid on inputs can also be claimed back, the net effect is that GST is paid on the net profit not gross profit. My mistake.

But, the net effect on a business in a competitive market is a 10% tax on the net profit of that business. And then a further 27.5 - 30% is taxed away in income tax.

In all seriousness "Hobby Sellers" or collectors very rarely make any "Profit" at all when they sell their collections, The vast majority of collectors normally LOOSE Money when selling their collections :angel:

Yes, actually, the taxpayer would not want hobby sellers registering as businesses, because then the hobby sellers could claim back on all their losses!

[trout]

It is usually BIG Business and very wealthy individuals that finds loopholes and various scams  to avoid paying their fair share of Tax.
I have serious doubts that your average coin dealer would be amongst this group and as far as your average collector goes, Well most of us have great difficulty just doing our income tax return let alone working out how to Skimp on the GST.

From my understanding of this new "Netflix" tax it was Harvey Norman that lobbied for it in an attempt to stem the tide of cheaper imported goods competing with the products in his stores via his internet sales competitors.
Yes the internet based companies WILL have to pay the extra 10% for the GST component if they sell via eBay But in reality the effect on these companies sales will be minimal and Harvey Norman has shot himself in the foot with this.
The trouble is the same bullet that went through Harvey's foot has ricocheted into Australian collectors Backs.

The ONLY winner out of all this is the ATO and once again your average collector gets an even bigger wrong end of the pineapple out of the deal.

[JeffH]

The ONLY winner out of all this is the ATO

That should mean all Australians as the money they collect is for our Government to spend on running the country.

The problem is the Government announces a tax review and "everything is on the table". Then the lobbyists start and things start falling off the table. By the time the review is done all that is left is a bit of fiddling around the edges and that is usually personal income tax. The current system is not effective and needs a comprehensive overhaul.

I believe the reason a limit was originally placed on applying GST to small overseas purchases was that the cost of administering it would be more than the tax collected. So next year when the "Harvey Norman Tax" comes in then the ATO (that is us) will be spending money to benefit Gerry Harvey and his cronies.
They would possibly be better off spending that money to ensure multinational companies pay their fair share of tax on Australian profits rather than making a loss (on paper) by claiming for dodgy "service fees" and interest on intra-company loans.

[ausproofs]

Some more interesting reading.

http://www.smh.com.au/business/federal-budget/happy-birthday-gst--time-to-grow-up-and-tax-more-food-20170626-gwz2lb.html

[nealeffendi]

The ONLY winner out of all this is the ATO

That should mean all Australians as the money they collect is for our Government to spend on running the country.

If you think it is a good thing that the ATO takes extra money from individuals then you are free to send your money to the ATO. Personally I'd rather keep MY hard earned money to spend/give how I choose instead of pollies wasting it on pork barrels, welfare queens and foreign aid to countries that despise us (that billion to Indonesia being an example).

[trout]

I am with Neil on this :good:
If I can use cash and dodge that Bloody GST which incidentally I and everyone else never voted for I will.
The more money the government can get its hands on the more it wastes and if anyone is going to waste MY money I much prefer that it was Me and not the government :angel:

[drakesterling]

I am with Neil on this :good:
If I can use cash and dodge that Bloody GST which incidentally I and everyone else never voted for I will.
The more money the government can get its hands on the more it wastes and if anyone is going to waste MY money I much prefer that it was Me and not the government :angel:

I have to disagree with this illegal behaviour. Illegally avoiding paying at least the bare minimum of taxes that we are required to pay just puts honest businesses at a competitive disadvantage.

If one doesn't like the tax regime in a country, vote for change at the ballot box or become a tax resident elsewhere (which, incidentally, is what a lot of people and companies do).

In the meantime, I'm paying my taxes as required by law (using tax deductions where I can), voting for low taxing political parties like the Lib Dems, and preparing for the day when I am wealthy enough to give one lucky tax jurisdiction the pleasure of taxing me.

Eric

[JeffH]

preparing for the day when I am wealthy enough to give one lucky tax jurisdiction the pleasure of taxing me.

I suggest not The Principality of Hutt River -could raise more problems than it overcomes.

I do agree that everyone should pay a fair share of the costs of operating the country. Pity that many wealthy people and large companies have the wherewithal to avoid doing so.

[Ozcoins]

I am with Neil on this :good:
If I can use cash and dodge that Bloody GST which incidentally I and everyone else never voted for I will.
The more money the government can get its hands on the more it wastes and if anyone is going to waste MY money I much prefer that it was Me and not the government :angel:

I have to disagree with this illegal behaviour. Illegally avoiding paying at least the bare minimum of taxes that we are required to pay just puts honest businesses at a competitive disadvantage.

If one doesn't like the tax regime in a country, vote for change at the ballot box or become a tax resident elsewhere (which, incidentally, is what a lot of people and companies do).

In the meantime, I'm paying my taxes as required by law (using tax deductions where I can), voting for low taxing political parties like the Lib Dems, and preparing for the day when I am wealthy enough to give one lucky tax jurisdiction the pleasure of taxing me.

Eric

Lib/dems low taxing?!

"Legally" avoiding paying tax has the same outcome as illegally avoiding paying tax.
The way things are done may be within the letter of the law, but certainly not the spirit.
B'S manipulation of costs happens all day, every day, to claim "Sorry no profits in Australia, so we dont have to pay tax"
They leave off "Thanks for being such a nice, wealthy, stable country that let's all the money go overseas tax free. We are happy to take advantage of all the good things, but contribute nothing"

[trout]

Pity that many wealthy people and large companies have the wherewithal to avoid doing so.

Crikey Mate didn't you know that's what us "Serf's" are here for, You cant expect the top echelon to pay their fair share do you.
If they had to do that then they wouldn't be sending any more cheques the their political parties anymore and the pollies would Hate it if that happened.

I have to disagree with this illegal behaviour. Illegally avoiding paying at least the bare minimum of taxes that we are required to pay just puts honest businesses at a competitive disadvantage.

I call BS on that Eric, Most of us pay more than a fair share of our income on taxes and we don't have the benefit of claiming any of the GST we pay each and every day.
I am pretty sure that coin dealers don't pay GST on a great deal of their coin purchases when they do a Cash deal so that is NO different than a collector doing the same thing.

[JeffH]

I'm not evading tax in any way shape or form. Of course I'm minimising my tax. If anybody in this country doesn't minimise their tax they want their head read. As a government I can tell you you're not spending it that well that we should be paying extra.

The late Kerry Packer (reluctantly he said) appearing before a parliamentary committee of enquiry.

And so say all of us in respect of the last sentence.

[nealeffendi]

preparing for the day when I am wealthy enough to give one lucky tax jurisdiction the pleasure of taxing me.

I suggest not The Principality of Hutt River -could raise more problems than it overcomes.

I do agree that everyone should pay a fair share of the costs of operating the country. Pity that many wealthy people and large companies have the wherewithal to avoid doing so.

Considering about a quarter of the country is sponging on welfare I'd say they are not only paying their fair share but are causing the rest of us to pick up their tab.
I remember after one shift about 6 years ago (12 hour shift in a recycling plant, hot and dirty work) getting on a bus and overhearing a conversation a hearing a couple discuss their upcoming trip to Europe, they could only go for 6 weeks before it would affect their pensions (looked to be under 50 and quite healthy). I could of afforded a return ticket to Europe every month back then with my then monthly tax burden. Now my taxes are even higher and I could afford a return ticket every fortnight with my tax bill (I work 70-80 hours/week in construction and security so my overtime is about half taxes). Pity that my last overseas holiday was 20 years ago.:@

[runway]

I am with Neil on this :good:
If I can use cash and dodge that Bloody GST which incidentally I and everyone else never voted for I will.
The more money the government can get its hands on the more it wastes and if anyone is going to waste MY money I much prefer that it was Me and not the government :angel:

I have to disagree with this illegal behaviour. Illegally avoiding paying at least the bare minimum of taxes that we are required to pay just puts honest businesses at a competitive disadvantage.

If one doesn't like the tax regime in a country, vote for change at the ballot box or become a tax resident elsewhere (which, incidentally, is what a lot of people and companies do).

In the meantime, I'm paying my taxes as required by law (using tax deductions where I can), voting for low taxing political parties like the Lib Dems, and preparing for the day when I am wealthy enough to give one lucky tax jurisdiction the pleasure of taxing me.

Eric

Agree Eric I pay my income tax and GST on everything and claim legit tax deductions ... it's the big overseas companies that are ripping off the system,supposably the government is doing something about it www.fairtax.com.au :wavemulticolor: