February19,2019

The New Zealand government announced on the 18th that next year, it will impose a digital service tax on large-scale technology industries such as Google, Facebook and Amazon. Following the United Kingdom, Spain, Italy, France, India and Australia, New Zealand becomes the country that solves the tax evasion problem of multinational technology companies with digital taxes. 

New Zealand Prime Minister Jacinda Ardern said that New Zealand's current tax system is not fair to treat individuals and multinational companies. Therefore, the law is being updated. A multinational company in a local country is generally charged a digital service tax at a flat rate of 2% or 3%. It is similar to the digital tax rates proposed by other countries mentioned above. 

New Zealand Finance Minister Grant Robertson said that the value of cross-border digital services in New Zealand is estimated to be about $1.86 billion. The revenue from the digital service tax is estimated to be between about $20 million and $55 million. It is expected that the relevant content of digital tax will be announced in May this year. It ensures that multinational companies pay reasonable taxes.

The United Kingdom plans to levy a digital service tax on internet giants from April 2020. British Finance Minister Philip Hammond pointed out that it is to push profitable multinational digital firms to make a reasonable contribution. He also said that the measure is mainly aimed at technology giants, not startups. New Zealand’s reasons for taxing technology giants are the same as those of European countries.  The EU and Australia are also consulting about the digital service tax.