Geof Nightingale: Independent Tax Expert on the impact of higher taxes on multinational tech companies like Google, Meta

A separate argument against major tech firms paying more tax. 

A report from tax expert Nick Miller says companies like Google are able to skirt their dues by taking payments from New Zealand subsidiaries, listed as service fees. 

He says they could be seen as royalties, which come under a withholding tax.  

However, another independent expert in the field, Geof Nightingale, told Andrew Dickens the Trump administration would push the cost back onto New Zealand businesses and consumers. 

If we were to tax the US tech giants more, we'd be slapped with a higher tariff on exports. 

LISTEN ABOVE  

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
The issue of big tech companies like Meta and Google
and Amazon not paying their fair share has come to
light again. A new report points out that the bloodline
of New Zealand subsidiaries making large payments to offshore affiliates
labeled as service fees as a bit of a rought,
withholding tax of just five percent, could bring an extra
one hundred and thirty million dollars in revenue to the

(00:21):
country if we did that. And Jeff Nightingale is an
independent tax expert and joins it now I'm morning to.

Speaker 2 (00:26):
You, Jeff, Good morning Andrew.

Speaker 1 (00:29):
My question has always been how did we let big
tech get away without paying tax in the first place.
I mean, you know, they're not breaking the law, they're
just following the code we set them.

Speaker 2 (00:39):
Yeah, that's that's right. So that's a very important point.
They're not breaking them all. But the question that the
report raises is the law currently correct and does that
result in the correct results for the New Zealand economy.
And the tax is pretty low, But the problem is
is that they the big tech companies, they're using a

(00:59):
tax system, an international tax system that has been designed
over the last hundred years, over one hundred years ago
that deals with sort of exports of goods and manufactured
goods and things, and doesn't really cope with what I
call digital weightless services. And so that's really the problem,
and that's given quite low levels of tax compared to
their turnover.

Speaker 1 (01:19):
Are these service fees I mentioned dodgy.

Speaker 2 (01:23):
No, they're not dodgy. They are the way that the
intellectual property is valued and paid for under our arms
length alls. So we have all these rules that say,
if you're trading with yourself across international borders, you've got
to do it on an arms links basis. And that's
the result they're giving. And the question the report's raising
and saying is that the right result? And there are

(01:46):
more complexions to it. Even if we could tax them more,
there's a real issue about whether we should tax them more.

Speaker 1 (01:53):
It's another report that points out the problem very very well,
but does it offer any answers and are there any answers?

Speaker 2 (02:00):
Well, there are answers the report suggests withholding tax. But
there's two risks with that approach. The first is that
we have in power in the US the Trump administration,
who has proven one hundred percent that they will retaliate
with tariffs on our export good. We already are being
hit with fifteen percent, but if we were to try

(02:21):
and tax the US digital giants more, it is highly
likely that we would get an increased tariff response. So
the question would be more taxes to New Zealand, but
higher tariffs on our exports. What's the right answer. That's
the first problem. The second problem is it's not clear
whilst you might collect the tax off the multinationals, they're
likely to pass it on to New Zealand businesses and

(02:43):
eventually consumers. So the economic incidents, who pays the tax,
who bears the cost shifts through to the consumers, so
we don't actually get it off them anyway.

Speaker 1 (02:52):
It's a fine pickle and thank you so much for
your time. Jeff Nightingale, independent tax expert.

Speaker 2 (02:58):
For more Familily edition with Ryan on Bridge, listen live
to news talks.

Speaker 1 (03:02):
It'd be from five am weekdays, or follow the podcast
on iHeartRadio.