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  • New Zealand is set to unveil legislation this week aimed at implementing a digital services tax on major multinational corporations, effective from 2025. Finance Minister Grant Robertson announced that the proposed tax would apply to international companies earning more than €750 million (approximately $810 million) annually from worldwide digital services. Additionally, companies making over $3.5 million (NZ$2 million) each year from digital services offered to users within New Zealand would be subject to this tax. This taxation plan resembles models adopted by other nations like France and the Kingdom, entailing a 3% levy on all taxable revenue from digital services within New Zealand.
  • The United States is expected to generate around 222 million New Zealand dollars (equivalent to 131 million US dollars) in tax revenue over a four-year period through the implementation of these taxes. This move follows a global trend of countries aiming to regulate digital services taxation to ensure a fair contribution from large corporations benefiting from their markets.

Why it matters

Many governments are concerned that companies like Google and Meta don't pay enough tax or don't pay it in the right places, and that current global tax rules don't adequately capture the way these companies make money. New Zealand's proposition of a digital services tax demonstrates the country's efforts to address the challenges posed by the digital economy and the tax avoidance practices of multinational tech giants.


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