Shopper thought GST he paid on AliExpress was going to the Australian Taxation Office. Photo / 123RF
Shopper thought GST he paid on AliExpress was going to the Australian Taxation Office. Photo / 123RF
A Hawke's Bay man has cast doubt on AliExpress' tax disclosure processes, claiming incorrect tax labelling on its e-commerce site made him believe he was paying Australian tax.
Napier-based Jeremy Strampel, who has been buying from AliExpress for years, says he recently noticed that the global marketplace based in Chinahad added "Australian tax" to his purchases.
The goods and services tax on his latest purchase - fishing headlights - had an asterix next to it, which explained what the tax was for and the amount.
The tax detail notice outlined that: "From 1 July 2018, Australian goods and services tax (GST) 10% will apply to each order valued at A$1000 or less".
It went on to say that Alibaba-owned AliExpress was "required by law to collect GST and remit to Australian Taxation Office".
Strampel told the Herald he was baffled to learn "Australian tax" of 10 per cent had been added to his order as New Zealand was listed as the delivery destination. There was no mention of any New Zealand tax, he said.
However, an inspection of screenshots of the transaction sent to the Herald show that he was charged the correct New Zealand tax of 15 per cent, but the wrong tax disclosure appeared on the transaction.
Strampel said the same Australian tax notice had been displayed on three separate instances, the first three months ago.
"It feels like they've got a bit mixed up."
But a spokesman for AliExpress denied that there had been any mix-up with its country tax disclosure notices.
"As a third-party marketplace, AliExpress complies with all laws and regulations in the markets where its sellers sell products. AliExpress has been collecting and remitting GST on low-value imports into New Zealand since the introduction of these tax changes," the AliExpress spokesman said.
"In this particular instance, the customer has been charged New Zealand GST at the correct rate of 15 per cent in accordance with NZ's tax regulations. Based on our investigations, the correct information regarding New Zealand GST collection is being displayed to customers for shipments to addresses in New Zealand."
It would not comment further.
The information displayed next to the tax asterix on Jeremy Strampel's AliExpress order. Photo / Screenshot
Tax expert Terry Baucher, founder of tax advisory firm Baucher Consulting, said it was likely that AliExpress was charging New Zealand shoppers the correct tax rate, but it did seem that it had been displaying the wrong disclosure information upon transaction.
Baucher had a look at the screenshots and confirmed Strampel had been charged the correct tax rate.
"They are charging the correct rate of GST even if procedurally the disclaimer doesn't look right," Baucher told the Herald.
"It is rather untidy by AliExpress."
Baucher said the introduction of GST collection from New Zealand shoppers by international businesses in December initially caused a headache for a number of e-commerce players.
Some internet retailers stopped shipping to New Zealand ahead of the GST changes, including Amazon-owned marketplace Shopbop and its brother site East Dane.
Terry Baucher. Photo / Supplied
These new rules were deferred for some time to allow e-commerce platforms to set up their systems to charge this, he said.
In December, the New Zealand Government introduced legislation that requires overseas businesses that sell goods to New Zealanders to charge GST on products valued at $1000 or less, in line with the same tax that is charged and collected via in-store purchases.
This means that online orders priced under $400 are generally now more expensive, while shoppers generally pay less on orders between $400 and $1000.
New Zealand originally introduced a goods and services tax of 10 per cent - the same as Australia's - in 1986. It was increased to 12.5 per cent in 1989 and 15 per cent in 2010.
