New Zealand 3% Digital Services Tax 2025

Proposed 2025 digital services tax on non-resident providers looms

Doubts remain on the 2025 imposition of New Zealands’ Digital Services Tax (DST) as OECD Pillar 1 reforms struggle. With the threat of retaliatory tariffs from the US following the Republican White House and Congress wins, a number of similar countries are debating whether to progress with such levies which largely fall on US digital giants.

At this late point, the legislative proceedings required to enact the levy would be challenging for enactment for the start of 2025. However, the forecast revenues are included in the 2024 budget.

The 2023 coalition government in New Zealand reintroduced the September 2023 draft legislation for a DST which would tax sales by non-resident providers of in-scope services to consumers. New Zealand’s moves shows frustrations with slow progress on a new global regime being championed as  by over 140. A moratorium for a further year on new DST was announced at the OECD in July 2023. Countries such as Canada DST are still going ahead in 2024.

The aim of DST’s  is to close the corporate income tax loophole under current global tax rules for foreign providers. This includes Facebook, Google and Apple earning income from social media platforms, search engines, and online marketplaces.

The implementation date would be 2025, although the Bill includes the potential to defer collections until up to 2030 if progress is being made by the OECD.

New Zealand will mirror the common thresholds for affected businesses:

1. Turnover above €750m per year globally; and
2. Turnover above NZ$3.5m in New Zealand

New Zealand GST on digital services was separately introduced in 2016.

Asia Pacific Digital Services Taxes (DST)