Quote:
Originally Posted by sherman
I believe what brought the current situation to a head was Netflix entering the NZ market (hence the reason for labeling it the 'Netflix Tax'). Basically, Netflix markets to NZers, charges us in NZD, and has a content catalogue specific to NZ. Yet when they arrived, they outright stated in public that as an international company they no obligation to charge GST, so they didn't.
Needless to say, the local alternative, Lightbox (itself very new to market) cried "Hang on a minute...!!", and as they say, the rest is history.
And for those crying "They should absorb the cost rather than complain!", 15% is not an insignificant amount to absorb, especially for what I imagine could be a fairly low margin business to begin with (if you aren't a big multinational anyway).
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Just for clarity for others (as I expect you are probably aware of this), Netflix will increase its charges to NZ subscribers by around 15% from end of October.
And, of course, Lightbox is free to many, perhaps most, subscribers so no GST involved at all there (however, quite a small selection of material).
Adding more:
NZ subscription charges for content can, of course be bypassed by using a VPN for a US Netflix subscription, say, which has become illegal if done for the purposes of allowing the "evasion" (evasion in "" because it is not in fact evasion as foreign suppliers are not subject to NZ tax legislation) but a common view is that, based on past behaviour, the Revenue should be expected to have bigger fish to fry than hunting down Mums and Dads using VPN which may be depriving the Revenue of a couple of dollars a month.
In the end it has been that (until relatively recently, I have not checked for a while) a NZ Netflix subscription was cheaper than a US one, so most VPN subscriber's interest was in the far greater selection of material from a US subscription and not for cost reasons; it may turn out, in the unlikely event it is tested (and it is something I have not looked into), that a US VPN subscription taken by a NZ resident for the purpose of access to greater content may be immune from any charge under tax legislation??