Are the Greens failing to uphold the Treaty?

The Taxpayers’ Union is calling on the Green Party to front up on whether its tech tax proposals are a breach of New Zealand’s treaty on double-taxation with the US.

Taxpayers’ Union spokesman James Ross said:

“Earlier this month, Chlöe Swarbrick said New Zealand needs to be responsible and uphold its international treaties or our trading relationships will be at risk. That was about the Paris Agreement, but does it only apply to treaties her party likes?”

“Despite the Greens’ claims, their ‘tech tax’ isn’t just better enforcement. Inland Revenue already has all the powers it needs to crack down on tech firms avoiding tax, IRD's expert analysts haven't just blanket reclassified offshore sales and service fees as royalties for a reason.”

“The Greens’ proposals can work one of two ways. Either IRD can review each tech firm’s business arrangements individually, as they do now. Only those which are actually dodging tax will see any tax changes, and the policy will be a damp squib with marginal revenue.”

“Or the Greens could legislate to rewrite how tech companies are taxed. Unilaterally deciding to tax sales booked offshore as if they were royalties - like the Greens are planning for Netflix and credit card companies - would likely breach our double tax agreement with the US.”

“The US is our second-largest market, with 12 percent of New Zealand’s domestic goods exports heading to America last year. If Swarbrick wants to try to sneak a digital services tax through the backdoor and start a trade war, the least she could do is let Kiwis know.”