The New Zealand Government introduced the Digital Services Tax Bill for its issuance to an eventual government as of January 1, 2025.
Background
The overall tax deal was entirely agreed in 2021 to be implemented in 2024. Conversely, the proposal was rejected last month after countries with Digital Services Taxes, except for Canada, agreed to postpone its implementation for at least another year.
Performance
The digital services tax bill was introduced in the Chamber on Thursday, August 31.
Multinational companies earning over €750 million per year from global digital services and over NZ$3.5 million per year from digital services provided to New Zealand users would pay the tax.
The expected amount to be collected is $222 million over the planned four-year period. The tax would be levied at 3% on New Zealand’s gross taxable income for digital services, a rate similar to those adopted by other jurisdictions such as France and the United Kingdom.
Other Countries
In April 2020, the UK released its Digital Services Tax, which subjects search engines, social media platforms, and online marketplaces earning income from users in the UK to a 2% tax on that income.
The international tax framework must continue to keep pace with changes in current business practices and increasing e-commerce.
Source: Transferpricingnews.com
