Recent reporting has highlighted Facebook’s practice of minimising the tax they pay in Aotearoa New Zealand, but fresh analysis released by the Better Taxes for a Better Future campaign shows this is a widespread practice among multinational tech companies – not just Facebook, and the amount of money being moved offshore is increasing, taking our tax revenue with it.
In an update to the 2025 Big Tech Little Tax report, author Nick Miller reviews the most recent financial statements of some of the biggest technology companies and looks back over the last 5 years to examine the trends.
“Google NZ paid away about 92% of its revenue in so called “service fees” to an associated company in Singapore in 2021 and has continued to do so every year, In that [5 year] period, its New Zealand revenues have increased by 66%…Google NZ has paid an aggregate sum of nearly $4.75bn to Google Asia Pacific Pte in Singapore while its average annual payment of corporate income tax [in New Zealand] has been about $6m.”
“[Amazon Web Services New Zealand Ltd’s] revenues have increased by over 400% in the same 5 year period. The amount paid out as a service fee to its parent and other group companies quickly rose in 2022 to over 70% of revenue and has remained at that level. AWS NZ has therefore paid away almost $1.25bn to Amazon group companies over the 5 years while paying just over $10m in tax.”
[Report extract]
The updated report also looks at the two Uber operating companies and finds that they appear remarkably similar to Google and Facebook in terms of the size of the “service fees” paid to associated companies, how little taxable profits are reported and that almost no corporate income tax is paid here.
“This updated research shows that for at least the past five years, many of these Big Tech companies have been describing as “service fees” payments to group companies that appear likely to be mainly for the use of intellectual property. These ought to be regarded as “royalties” under existing New Zealand law and double taxation agreements, and subject to withholding taxes,” says report author, Nick Miller.
“By miscategorising these payments, companies that are earning aggregate revenues of billions of dollars in New Zealand are avoiding these taxes and minimising the overall tax they are contributing back into our economy.”
Another area of concern is the practice adopted by Microsoft and Amazon data centres operating in New Zealand whereby the local subsidiaries receive a service fee from group companies while the actual revenue earned by the centre seems likely to be reported elsewhere.
There are still more companies that we don’t know anything about because they are not required to file financial statements because their assets were less than $22 million or their revenue was less than $11 million.
“These companies include MasterCard NZ, Netflix NZ, Booking,Com, AirBnB even though it is obvious that the revenues earned in New Zealand by these groups are going to be many times greater than $11m…these companies operate a “service company” model in which the New Zealand subsidiary is remunerated for services while the revenue generated by the activities of the subsidiary here is paid offshore.”
[Report extract]
“Overall a conservative estimate of the tax loss to New Zealand over the last five years is over $600 million from just eight of the big tech companies. This excludes many tax minimising multinationals, including those that aren’t disclosing their financials,” says Miller.
“Just this week we’ve seen Elon Musk be crowned the first trillionaire, and tech loomed large in the NBR’s Rich List. These companies are generating enormous profits for their executives and shareholders, relying on our infrastructure and services, but are not paying their fair share to maintain them. The Government needs to stand up for local businesses and hard working New Zealanders and make Big Tech pay.”
Read the updated analysis: https://www.bettertaxes.nz/big_tech_little_tax_update?e=a058f8e1b0ba0a060f4e57ba89e35ae1&utm_source=tja&utm_medium=email&utm_campaign=big_tech_update&n=3
Read the 2025 Big Tech Little Tax full report. See recommendations from Big Tech Little Tax report here: https://www.bettertaxes.nz/big_tech_little_tax?e=a058f8e1b0ba0a060f4e57ba89e35ae1&utm_source=tja&utm_medium=email&utm_campaign=big_tech_update&n=5