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New Zealand Weighs Digital Tax Amid Big Tech Scrutiny

9/4/2025

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Summary

Story summary

In 2018, the EU reported that digital companies paid only 9.5% tax, leading New Zealand to consider a Digital Services Tax (DST), which was later abandoned due to US pressure.
New Zealand's corporate tax rate is 28%, but OECD's "pillar two" rules may not raise taxes on offshore multinationals.
A report indicated that New Zealand subsidiaries of Big Tech show low taxable incomes despite high inter-company fees, raising tax compliance concerns.
A proposed 5% withholding tax on inter-company payments could generate significant revenue, though its legality is uncertain.
Companies like Meta and Google claim compliance with local tax laws and contributions to New Zealand's economy.

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Story summary

In 2018, the EU reported that digital companies paid only 9.5% tax, leading New Zealand to consider a Digital Services Tax (DST), which was later abandoned due to US pressure.
New Zealand's corporate tax rate is 28%, but OECD's "pillar two" rules may not raise taxes on offshore multinationals.
A report indicated that New Zealand subsidiaries of Big Tech show low taxable incomes despite high inter-company fees, raising tax compliance concerns.
A proposed 5% withholding tax on inter-company payments could generate significant revenue, though its legality is uncertain.
Companies like Meta and Google claim compliance with local tax laws and contributions to New Zealand's economy.