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Key doubts a unilateral 'Google tax' would work

Monday 27th June 2016

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The New Zealand government is sticking with the OECD's process for pushing multi-national corporations to pay more tax rather than pursuing the kind of 'Google tax' being mooted in Australia and the UK, said Prime Minister John Key.

Commenting on the release of the government's response to the latest leg of the OECD's base-erosion and profit-sharing (BEPS) tax project, Key said officials were sceptical that a tax based on the declared annual turnover in New Zealand by multi-nationals such as Google or Facebook would collect much revenue.

New Zealand was working "on our own model", he said, but declined to comment on what that approach might entail, pointing instead to the government's preference to go along with the BEPS process.

"In our view and the advice we had initially was that New Zealand wouldn't earn a lot more revenue" from a tax based on multi-nationals' local turnover, he said. "The officials don't think there's a missing pot of gold out there.

"By far, the only really robust way to work is with the OECD. There's quite a lot of scepticism that unilateral taxes would work.

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