IBX-Jakarta. New Zealand will implement a digital services tax in 2025 if international agreement on the issue fails to pass through, Finance Minister Grant Robertson has said.
Robertson said that the government will introduce a Digital Services Tax Bill in the House tomorrow.
Robertson said that while the government agreed not to bring in a unilateral measure until January 1, 2025, it will not “simply wait around until then to find out.”
“We have been actively participating in negotiations at the OECD for a multilateral agreement to address these issues. This work is making slow progress,” he said.
Robertson said: “It’s clear that the international tax framework hasn’t kept pace with changes in modern business practice and with the increasing digitization of commerce. This is a problem faced by countries across the world. With more and more overseas businesses embracing digital business models, our ability to tax them is restricted and the burden falls to smaller groups of taxpayers.”
The minister said the government will keep working to support a multilateral agreement.
The proposed digital services tax will target large multinational businesses that earn income from New Zealand users of social media platforms, internet search engines, and online marketplaces.
The proposed tax would be payable by multinational businesses that make over EUR 750 million a year from global digital services and over NZD 3.5 million a year from digital services provided to New Zealand users.
The tax would be applied at three percent on gross taxable New Zealand digital services revenue, a similar rate to those adopted by other jurisdictions such as France and the United Kingdom.
Source:https://transferpricingnews.com/new-zealand-will-bring-digital-services-tax-if-global-agreement-fails/
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