New Zealand to Target Online Giants With Digital Tax

New Zealand stated on Monday it plans to upgrade its own legislation so that it can tax earnings earned by multinational electronic firms such as Google, Facebook, and Amazon, expanding a global effort to deliver international tech giants into the tax net.

“Our present 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, like the ones offering social media networks, trading platforms, and online advertising, now make a significant income from New Zealand consumers without being answerable for income tax, the government said in a statement released following the announcement.

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

The revenue estimate for a digital services taxation is involving NZD 30 million and NZD 80 million, Finance Minister Grant Robertson stated in the statement.

Digital services taxes (DST) are generally charged at a flat rate of just two to 3 percent on the gross earnings earned by a multinational firm in that country.

The EU and Australia will also be consulting on a DST.

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

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