Do Customs Collect GST on Items Purchased from Duty-Free Stores?

• 

  Alan6984 on 04/02/2022 - 17:32

  As far as I am aware, there is no 'personal use' waiver - in fact, the very concept of GST is that it is a tax on consumption (a tax on people who use up stuff - take it out of the pie if you like, rather than people who produce stuff - add into the pie - which would be income tax), so personal use is where you would hope that the cumulative GST cost would land.

  I would imagine that customs duty would also only apply when you import goods (effectively, send money out of NZ to overseas), which is what you would be doing when you bring a new phone in from air-side to NZ proper.

  The exemption you might be thinking of would be if you were permanently exporting the goods overseas. In that case, I would not expect NZ GST to apply, but that would be on the way out, not on the way back in.

  Of course, I might be wrong :-)

  Alan.

  • 

    ace310 on 04/02/2022 - 18:07

    So if there is no gst on way out, is it fair to say if I buy the phone while departing and open it and start using it I won't be liable to pay gst?

    Not that I am leaving nz anytime soon but just a thought.

    • 

      Alan6984 on 04/02/2022 - 19:34

      Well, I guess that it is like many taxes - you might be able to evade it, but if you get caught, then you had best be willing to accept the consequences.

      If you buy it on the way out and claim that you are permanently exporting it when you aren't, then you are breaking the law.

      It's a bit like people that send in false GST returns or income tax returns - you might get away with it, but if you get caught, the consequences can be catastrophic.

      Alan.

  • 

    Nil Einne on 04/02/2022 - 23:37

    There is an exemption for personal effects but this is referring to items that you wear like clothing, jewelry and cosmetics https://www.customs.govt.nz/personal/duty-and-gst/household-…

    The exemption is controversially used to buy expensive jewelry like engagement rings or wedding rings, duty free as the retailer sets it up so you can export the items which you then bring back. I see some suggestion e.g. in the NZ Herald that personal effects applies to watches so I guess this might be possible with a smart watch (but don't treat this as reliable advice), but I'm fairly certain it does not apply to a phone.

    https://www.nzherald.co.nz/nz/rings-wing-way-past-gst/JA6QES…
    https://thediamondshop.co.nz/pages/save-on-gst
    https://www.villagegoldsmiths.com/services/tax-free-purchase…
    https://www.diamonds.co.nz/about-us/services/gst-free-diamon…

    If you're moving back to NZ after 21 months or more, you can import your household effects without paying GST, but that's a fairly different thing and the items need to have been owned (sometimes for 12 months or more) overseas.

• 

  Madao on 05/02/2022 - 11:03

  +1

  Yes, in theory you should declare and pay GST as you are a) bringing it back in to the country and b) its over the $700 limit.

  Take a photo of the receipt and email it to yourself, for warranty purposes. Then throw away the box and receipt in Raro. You'll be fine coming back in, even if you are stopped.

• 

  Superpower21 on 05/02/2022 - 23:36

  Bought an iPhone (about $1900) a few years back from duty free shop on arrival, didn't pay gst. Is this the whole point of being duty free?

  • 

    Alan6984 on 05/02/2022 - 23:55

    Only up to the limit of $700 (or whatever it is now).

    Same as saying you bought 10,000 cigarettes or 100L of booze - there are allowances / limits there too to keep them admin down.

    Sounds like you broke the law. Maybe you got away with it, but you still broke the law, even if in ignorance.

• 

  milan on 07/02/2022 - 13:27

  UPDATE: I didn't end up buying one because they didn't have the model I wanted in stock. However I did find out from Customs website that I do not need to pay GST when coming back in NZ, had I purchased the item prior to departing from NZ.

  https://www.customs.govt.nz/personal/travel-to-and-from-nz/t…

  Declaring items you owned before leaving NZ

  When you arrive in NZ, you don’t need to declare any items that you had before you left the country (including duty-free bought before leaving).

  If you’re worried that items you took overseas could affect your duty-free allowance, you can ask us for a Certificate of Export. This is proof that you owned the item when you left NZ.

  You can get the certificate from us before you leave NZ. We can only issue it for uniquely identifiable items, eg with serial numbers.

  If the items are new video or camera equipment, we suggest you carry documents proving you already owned them before you left.

  • 

    Alan6984 on 07/02/2022 - 14:30

    That's a great find - seems kinda counter-intuitive, but very useful (or at least, it will be, once we can freely leave and get back in!) The only issue is that you have to carry something expensive (like a laptop or high end phone) around with you overseas which might be a bit of an issue on a holiday depending on destination. One option that might be worth it for something particularly expensive would be to see if there are (secure!) lockers you could hire, either at Auckland International or at your destination airport, and leave it there until you are coming back. No idea if they exist or what they might cost though.

    Good work!

    Thanks,

    Alan.

    • 

      milan on 07/02/2022 - 21:30

      Thanks Alan for your insights.

      One potential workaround may be choosing to pay for the item before departure, and pick up on arrival. Some duty free stores offer this option. This way technically the purchaser already "had" the item before departure. Not sure whether NZ Customs' opinion on that though.