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Thread: GST / Import duties during immigration

  1. #1
    Join Date
    Sep 2008
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    Default GST / Import duties during immigration

    GST / Import duties during immigration

    I'd like to find out about the Customs charges that might be incurred when importing a brand new item along with the rest of 'normal' household goods at the time of immigration (with PR or WTR visa, etc.). Let's assume that I've got a 20ft container for my own use, and I've filled it 80% full with all my household junk, furniture, etc., and all my household items are "used" (i.e. nothing "new").

    Then maybe I want to use some of the remaining 'free' container space to ship out something new which I've just bought because it will cost lots more to buy in New Zealand. I'll use the example of a Jetski costing 5000 + VAT. (Note: I don't actually want a Jetski, and don't have a clue what they cost in the UK or in NZ!!)

    If I'm "exporting" the goods from the UK then I may be able to avoid paying the UK VAT charge, but I'm sure I *will* have to pay relevant NZ import duties. This is where I get a bit confused, as the NZ Custom's website says:

    "Customs duty is levied on the transaction value of the goods (the price actually paid for them). Goods and Services Tax (GST) of 12.5 percent is then calculated on the duty-inclusive value plus international freight and insurance charges".

    If I'm reading that correctly, it suggests the transactional value would be 5000, and 'duty' would be levied on that to generate a "duty-inclusive value". Where do they get the "duty" value from? I saw a table suggesting that duty on "boats" is 18%. Then an additional amount for "international freight and insurance charges" are added - and that bit really confuses me. If I've transported the goods in my container then there isn't any extra 'freight or insurance' charges. So do Customs work out a "proportional" value instead, or work out how much I would have paid if I'd exported out the goods as a completely separate shipment?

    On top of all that, the wording on that Customs page then suggests an extra 12.5% GST is added to the "duty-inclusive" + freight costs.

    So in the worst case, it looks like the final calculation would be (5000 + shipping & insurance) x 18% 'duty', and then another 12.5% GST on top..!

    Have I misunderstood something, or is it really that expensive to import new items into NZ?

    Cheers,
    Pete.

  2. #2
    Join Date
    Dec 2007
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    Stanley Bay, Auckland, NZ
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    Quote Originally Posted by PeKaJoSa View Post

    So in the worst case, it looks like the final calculation would be (5000 + shipping & insurance) x 18% 'duty', and then another 12.5% GST on top..!
    Have I misunderstood something, or is it really that expensive to import new items into NZ?
    Just checked with my friendly GST / Customs Duty expert who sits besides me and you are almost 100% correct on this bit!
    Quote Originally Posted by PeKaJoSa View Post
    If I'm "exporting" the goods from the UK then I may be able to avoid paying the UK VAT charge
    This depends on what you are exporting and how you are doing it. If you buy a jetski then you are more likely going to have to pay the VAT as well as you can't claim VAT back on goods that you export as freight!

    The shipping and insurance will be pro-rated based on size and the value of item vs value of all goods respectively (although there is no set formula but this is the practical approach customs take).

    Not all goods have dutiable values though - but GST must still be paid.


    Therefore the final formula would look like this: (5000 + VAT + shipping & insurance) x 18% 'duty' x 12.5% GST (the GST and duty are calculated on the purchase price - including VAT).

    His advice is to take whatever you buy out of its wrappers, use it a couple of times, stick it back in its wrappers and ship it over here as used.

  3. #3
    Join Date
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    Onamalutu, The Mainland, NZ
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    Quote Originally Posted by James 1077 View Post
    This depends on what you are exporting and how you are doing it. If you buy a jetski then you are more likely going to have to pay the VAT as well as you can't claim VAT back on goods that you export as freight!
    Yes you can. Talk to the supplier of the goods and you can pay a deposit against the VAT that can be reclaimed when the goods leave the country (UK). I seem to remeber that there was a 3 month limit on the transaction and the export of the goods. We did it with some stuff when we came out here, and I don't suppose the VAT rules have changed that much!

    Quote Originally Posted by James 1077 View Post
    His advice is to take whatever you buy out of its wrappers, use it a couple of times, stick it back in its wrappers and ship it over here as used.
    Agreed! What they don't know, won't hurt them.

  4. #4
    Join Date
    Sep 2008
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    Basingstoke, United Kingdom
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    James -

    Thanks for your swift & comprehensive reply!

    I've just thought of a real-life example which I could possibly see myself doing: Importing a heat-pump. I saw a brand new Worcester "Greensource" 9KW air-to-water heatpump available in the UK for around 6400 (inc. VAT) - roughly $17,500 NZD.

    Now it's rather difficult to "take it out of the packaging and use it a couple of times" (difficult, but I suppose not completely impossible!) .. but let's assume that I am bringing it in as "new". If I take a guess at Customs calculating the shipping cost at say 300, would it be reasonable to calculate the import cost as follows:

    (6400 + 300) x 18% duty plus 12.5% GST? (Total around 8900)

    If that's right, it means that import duties add 2500 to the cost - almost 40% on the initial purchase price of the goods!!!

    Suddenly the effort needed to "take the goods out of the wrapper and use them a few times" seems a lot more appealing..!!!

    Cheers!
    Pete.

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