Taxation of Global Digital Matchmakers: A Tentative Step Forward?
New Zealand Business Law Quarterly (March 2018) vol. 24(1)
16 Pages Posted: 15 Oct 2019
Date Written: 2018
Abstract
Using the example of Google, this article discusses the problem of the “fiscal absence” (or limited fiscal presence) of global digital matchmakers remotely selling Internet advertising and digital intermediation services in New Zealand over the Internet. The article evaluates the response to this problem proposed by the Taxation (Neutralising Base Erosion and Profit Shifting) Bill, which was introduced into Parliament on 6 December 2017, and the OECD’s Interim Digitisation Report of 16 March 2018 on the implications of digitalisation for taxation. Building on this analysis, the article suggests that New Zealand should introduce an excise tax, as discussed in the OECD’s Interim Report, to protect its national tax base from erosion, while waiting for a suitable international solution to be developed to the division of the gains generated in today’s integrated and digitalised global economy.
Keywords: Google, digital economy, Digital Services Tax
JEL Classification: K34
Suggested Citation: Suggested Citation