New Zealand to Target Online Giants With Digital Tax

New Zealand said on Monday that it intends to upgrade its own legislation so that it can tax revenue earned by multinational electronic companies such as Google, Facebook, and Amazon, extending a global effort to bring international technology giants into the tax net.

“Our current tax system is not fair in how it treats individual tax payers, and how it treats multinationals,” Ardern told reporters at her weekly post-cabinet news conference.

Highly digitalised companies, such as those offering social networking networks, trading platforms, and online marketing, now make a significant income from New Zealand customers without being answerable for income tax, the government said in a statement released following the statement.

The value of cross-border digital services in New Zealand is estimated to be around NZD 2.7 billion ($1.86 billion).

The revenue estimate for a digital services tax is between NZD 30 million and NZD 80 million, Finance Minister Grant Robertson stated in the announcement.

Digital services taxation (DST) are generally charged at a flat rate of two to three percent on the gross revenue earned by a multinational company in that nation.

Numerous countries such as the UK, Spain, Italy, France, Austria and India have enacted or announced plans to get a DST. The EU and Australia will also be consulting on a DST.

Officials will now finalise the New Zealand discussion document on the matter, which is very likely to be publicly published by May 2019.


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