New Zealand looks at ‘Netflix tax’

Authorities in New Zealand are deciding whether to introduce a local ‘Netflix tax’, a new levy on imported digital products such as the US streaming service.

The Netflix goods and services tax (GST) would also apply to music streaming service Spotify as well as other digital streaming and download products including e-books and games.

The new tax is outlined in a new discussion document and, if introduced, will likely require the likes of Netflix to register with New Zealand’s tax department in order to pay the levy on behalf of its consumers.

Netflix has previously told TBI that it will pass on the cost to consumers, raising the prospect of consumers facing bigger bills for Netflix in New Zealand. It rolled out in the country earlier this year.

Kiwi authorities estimate the effect of lost offshore online shopping taxes at about NZ$180 million (US$117.8 million) a year.

Prime Minister John Key said: “The government is trying to balance up the need to be fair to existing retailers with bricks and mortar on the ground and the fact that we’ve got a hole in our revenue accounts emerging with more and more purchases being on line but also reflecting the fact consumers, both for convenience and not necessarily just price, do want to purchase online.”

Other territories have also attempted to tax international streaming services, as had the US state of Chicago.