Aliexpress dodgy GST tax

[tszaboo]

When you sell, you add VAT to the price. Then you deduct the VAT of whatever you had to buy to be able to deliver the product. End result is, you (or more appropriately, your customer) is paying tax for the value increase only. Pretty simple.

VAT is just a sales tax with a lot of back and forth happening in intermediate stages. You as individual just pay tax on full value that sort of compounds in intermediate stages, but actually does not really. Naming it VAT makes no sense for final customer as it's anything but, its name only makes sense in the context of back and forth going in between of businesses and TAX agency. It could be just removed in all intermediate stages (it actually is in cross country sales within EU between VAT registered entities) with the same end result. It's just stupid when I have to pay VAT when clearing customs for shipments for my business to just get it reimbursed by tax agency a month later since I almost never sell within Latvia and to individuals.

But it wouldn't be the same. You buy two things for 1 EUR each, put it together, sell it for 3 EUR, pay after 1 EUR as tax. Your government gets tax after 1 EUR "Value added". Someone else stocks it, puts it in a store sells it for 5 EUR, they pay for 2 EUR value added.  It's the same for the end customer, but it's very different for countries that don't make end product. Besides, what is an end product anyway? A fridge might be an end product for a consumer, or a tool without VAT for a bakery.

[wraper]

When you sell, you add VAT to the price. Then you deduct the VAT of whatever you had to buy to be able to deliver the product. End result is, you (or more appropriately, your customer) is paying tax for the value increase only. Pretty simple.

VAT is just a sales tax with a lot of back and forth happening in intermediate stages. You as individual just pay tax on full value that sort of compounds in intermediate stages, but actually does not really. Naming it VAT makes no sense for final customer as it's anything but, its name only makes sense in the context of back and forth going in between of businesses and TAX agency. It could be just removed in all intermediate stages (it actually is in cross country sales within EU between VAT registered entities) with the same end result. It's just stupid when I have to pay VAT when clearing customs for shipments for my business to just get it reimbursed by tax agency a month later since I almost never sell within Latvia and to individuals.

But it wouldn't be the same. You buy two things for 1 EUR each, put it together, sell it for 3 EUR, pay after 1 EUR as tax. Your government gets tax after 1 EUR "Value added". Someone else stocks it, puts it in a store sells it for 5 EUR, they pay for 2 EUR value added.  It's the same for the end customer, but it's very different for countries that don't make end product. Besides, what is an end product anyway? A fridge might be an end product for a consumer, or a tool without VAT for a bakery.

Buy two things, get credit on VAT paid for those, then sell with VAT on a full value. It's the same as if you did not pay VAT to your suppliers to begin with.
It's like arguing what's more expensive, $120 thing with $20 rebate or $100 thing with no rebate. It's only consumer that does not get the rebate at the end of the chain.

[pcprogrammer]

VAT is one of the simplest and most obvious forms of taxation, and it's pretty similar all over the world (maybe with small implementation detail differences), so I'm quite surprised to see you struggle with the concept!

I don't struggle with the concept, I just hate having to pay it.

Did my books myself and in the beginning the VAT was only once every quarter. At some point my income and work load grew and the tax office decided I had to do the VAT declaration every month. Sure earned a lot of money, but it also increased the work load, both client and tax work. Reaped the benefits of it too though. Could not have afforded the very expensive oscilloscope I have otherwise. No VAT and tax deductions based on investments. 

Also VAT is kind of double taxing but for sure a big income for the government. You hire someone, pay the VAT and the worker. The worker then pays income tax over what you payed him, and VAT for all his non business purchases, etc.

The whole thought behind the VAT on foreign webshops was to equalize the playing field for local sellers, but the only one gaining from it are the governments. They take yet again a piece of the pie.

The boatload of work has more to do with what brucehoult mentioned about the different VAT rates that we have now. 

[c64]

Where do you see that you are charged at least $1 GST? I've always paid 10% no matter what the total (price + shipping). AliExpress is registered in Australia and is obliged to collect GST.

Pretty much all the promotional items sold for under couple of bucks (including shipping). Look for example at this store, they have few items under $1 for first time buyer
https://www.aliexpress.com/store/1102126606

I'm pretty sure, if I try this kind of shit (charging more than 10% GST) as a business here, I will get a visit from ATO (ato.gov.au) pretty soon

[retiredfeline]

Pretty much all the promotional items sold for under couple of bucks (including shipping). Look for example at this store, they have few items under $1 for first time buyer
https://www.aliexpress.com/store/1102126606

I can't replicate your problem but I'm not a first time buyer so those < $1 don't appear for me. But I did find a cheap item < $10 (including shipping) and the GST was correctly calculated. You'll need to show us a summary panel to prove your experience.

[soldar]

For shipping to Australia, Aliexpress must charge 10% GST. However, for most cheap items, it's usually more than 10%.
For example, I've seen something on special for less than $1 delivered, and they want to charge more than $1 just for GST.

Is it even legal?

My guess is that it is not only not legal but not even happening and that you are misinterpreting the information you have.

[c64]

For shipping to Australia, Aliexpress must charge 10% GST. However, for most cheap items, it's usually more than 10%.
For example, I've seen something on special for less than $1 delivered, and they want to charge more than $1 just for GST.

Is it even legal?

My guess is that it is not only not legal but not even happening and that you are misinterpreting the information you have.

Why don't you find something under $1 with free shipping, change your country to Australia, and send us your screenshot? Every item under $1 I've seen so far has tax incorrect

[c64]

Pretty much all the promotional items sold for under couple of bucks (including shipping). Look for example at this store, they have few items under $1 for first time buyer
https://www.aliexpress.com/store/1102126606

This shop doesn't have anything under $1 any more, here is another random find

[Psi]

I buy stuff from aliexpress through my business often and clam back the GST  (NZ)

If I pay in USD the GST on the invoices is always correct (15% of what I pay for item) except for currency conversions rounding errors, because they charge the GST as 15% on the USD price then give you an estimate for what that might be in NZD. (Since the exchange rate isn't locked in until the transaction is processed it can move a little).

If I pay in NZD sometimes the invoice total is out by $0.01 vs what I'm charged. but I've not seen that issue in a while so it might be fixed.

But yeah, other than tiny rounting/conversion errors I've never had any oddness with GST on Aliexpress.

[retiredfeline]

This shop doesn't have anything under $1 any more, here is another random find

Give us the link and I'll try to reproduce it. What does it tell you when you click on the ? for info on the tax?

[brucehoult]

This shop doesn't have anything under $1 any more, here is another random find

Give us the link and I'll try to reproduce it. What does it tell you when you click on the ? for info on the tax?

Note that in additional to GST (which is on everything) Australia imposes import duty on pretty much everything. The GST is calculated on the total of the goods, the value of the shipping (whether you actually pay that or not), and the duty, which I believe (I'm in NZ not Aus) is a minimum of 5% but can be a lot more.

[Psi]

This shop doesn't have anything under $1 any more, here is another random find

Give us the link and I'll try to reproduce it. What does it tell you when you click on the ? for info on the tax?

Note that in additional to GST (which is on everything) Australia imposes import duty on pretty much everything. The GST is calculated on the total of the goods, the value of the shipping (whether you actually pay that or not), and the duty, which I believe (I'm in NZ not Aus) is a minimum of 5% but can be a lot more.

Aliexpress pre-pay the GST. Duty is applied/charged by local customs clearance when your item passes through customs and is totally separate invoice you pay.
Duty only gets charged if your orders is large enough for customs to bother with it.
Some items have zero duty
At least in NZ

[brucehoult]

This shop doesn't have anything under $1 any more, here is another random find

Give us the link and I'll try to reproduce it. What does it tell you when you click on the ? for info on the tax?

Note that in additional to GST (which is on everything) Australia imposes import duty on pretty much everything. The GST is calculated on the total of the goods, the value of the shipping (whether you actually pay that or not), and the duty, which I believe (I'm in NZ not Aus) is a minimum of 5% but can be a lot more.

Aliexpress pre-pay the GST. Duty is applied/charged by local customs clearance when your item passes through customs and is totally separate invoice you pay.
Duty only gets charged if your orders is large enough for customs to bother with it.
Some items have zero duty
At least in NZ

I'm familiar with how things work in NZ as I live there. In NZ we are now fortunate to not pay GST or duty or customs processing fees on anything under $1000, if the original vendor is not in the overseas GST adding system. And very little has duty outside of booze and tobacco and some clothing and footwear.

But the conversation is about Australia, which is quite different. They, as I said, add duty to EVERYTHING imported (over some base value), they have rather large duty on a lot of things such as for example I think motor vehicles which NZ doesn't have (and they don't even make tham in Australia any more!)

As I understand it, Canadians are unfortunate to have to pay tax and processing fees on anything over $30.  Ouch!

[c64]

This shop doesn't have anything under $1 any more, here is another random find

Give us the link and I'll try to reproduce it. What does it tell you when you click on the ? for info on the tax?

Try these, only works for first time buyer
https://www.aliexpress.com/item/1005005977505151.html
https://www.aliexpress.com/item/1005006336964908.html
https://www.aliexpress.com/item/1005005956297621.html

Can you give me link to any item (under $1 free shipping) which have tax correct? Every one I click are incorrect.

(?) info on the tax is exactly the same as for all other items

[David_AVD]

When you say "first time buyer" do you mean first time buying from that store, or first time buying anything from AliExpress?

[c64]

I suppose "from that store". Or who never used "shipped by aliexpress" - all of these specials are shipped by aliexpress

What kind of price you see for those links?

[retiredfeline]

I'm not a first time buyer, I think it means for all of AliExpress, so I don't get any special prices or free shipping. Here are my results, all calculated correctly AFAICT:





It is possible that with the compilcations of being first time buyer and free shipping, there is a bug in their calculations. Have you contacted AliExpress?

[SiliconWizard]

As I understand it, Canadians are unfortunate to have to pay tax and processing fees on anything over $30.  Ouch!

Well, over here, it went, if I'm not mistaken, from 100 eur to 20 eur to now the first euro. Yay. Of course, a lot of small items manage to get through, but you never know.

[SiliconWizard]

Buy two things, get credit on VAT paid for those, then sell with VAT on a full value. It's the same as if you did not pay VAT to your suppliers to begin with.
It's like arguing what's more expensive, $120 thing with $20 rebate or $100 thing with no rebate. It's only consumer that does not get the rebate at the end of the chain.

Yes. Normally, only the customer at the end of the chain really pays the VAT.

One more dubious use of VAT, though, is when selling second-hand products. What's the value added in this case, and in effect VAT will have been paid several times on the same goods. Ah, the beauty of taxes.

[David_AVD]

I suppose "from that store". Or who never used "shipped by aliexpress" - all of these specials are shipped by aliexpress

What kind of price you see for those links?

Same pricing and correct GST as retiredfeline has above.

[brucehoult]

One more dubious use of VAT, though, is when selling second-hand products. What's the value added in this case, and in effect VAT will have been paid several times on the same goods. Ah, the beauty of taxes.

If the person selling those second-hand products is GST-registered then they get to claim back the GST on any decrease in value between when they bought them and sold them.

If the entity buying the used goods is GST-registered then they also can claim back the GST component (i.e. 13.04% here in NZ where GST is 15%)m whether the used-seller is GST registered or not.

And the non GST-registered seller effectively (but unofficially) also gets back the GST component of the used goods they sell, as the price implicitly includes GST, but they don't have to tell the government they sold it. i.e. people who are not GST-registered effectively get back the GST on things they bought i/when they later sell them, rather than in their next GST tax return.

[pcprogrammer]

Buy two things, get credit on VAT paid for those, then sell with VAT on a full value. It's the same as if you did not pay VAT to your suppliers to begin with.
It's like arguing what's more expensive, $120 thing with $20 rebate or $100 thing with no rebate. It's only consumer that does not get the rebate at the end of the chain.

Yes. Normally, only the customer at the end of the chain really pays the VAT.

One more dubious use of VAT, though, is when selling second-hand products. What's the value added in this case, and in effect VAT will have been paid several times on the same goods. Ah, the beauty of taxes.

What about sending something from the UK to the EU. Even if it is a gift they slap on import duties that make your head spin.

[pcprogrammer]

First time buyer will also show up when you are not logged in.

As soon as you log into Aliexpress and have an order history the price will jump up to it's normal value. The only way to profit from it would be registering as a new customer every time, but maybe they also check on shipping address or payment account. I never tried it.

[Brian of Romsey]

I've experienced vendors where the shipping goes up a small amount for the second unit but outrageously for subsequent units.  I've sometimes found it cost effective to make several purchases of smaller quantities of the same thing.  I believe the expression is "play stupid games, win stupid prizes" so I'm happy to game them.

[pcprogrammer]

I've experienced vendors where the shipping goes up a small amount for the second unit but outrageously for subsequent units.  I've sometimes found it cost effective to make several purchases of smaller quantities of the same thing.  I believe the expression is "play stupid games, win stupid prizes" so I'm happy to game them.

Yep, it makes shopping more of a task. 

I have seen this with resistors where adding different values up to 5 did not raise the shipping cost and then adding a 6th one doubled the shipping. Up to number ten the same cost, to triple it on number eleven. So there the economizing was to add just the right amount to benefit from the lowest average shipping costs.

Your type I have also seen for things like the bluepill or Arduino nano. In that case indeed, order the minimum amount per order. At times when I did this, they stuck them in the same envelope anyway.