On 28 March 2024, the New Zealand Taxation (Annual Rates for 2023-24, Multinational Tax, and Remedial Matters) Act (‘Act”) containing amendments to the Gaming Duties Act 1971 was passed by the New Zealand Parliament and has subsequently become law.
The Act introduces a new type of gaming duty, known as the ‘offshore gambling duty’. This duty aims to strengthen the regulatory environment relating to offshore online casinos providing services to New Zealand residents which currently only pay a goods and service tax (GST). This will come into effect on 1 July 2024, when a 12% duty will be payable in addition to GST. This will result in offshore gaming operators paying an overall tax rate of 25% on gross betting revenue1.
The offshore gambling duty will not apply to offshore gambling operators to the extent that they provide wagering options for ‘sports and racing’ to New Zealand residents. The profits generated from such services will continue to be subject to ‘point of consumption charges’ of 10% (which are payable in addition to GST and product fees).
Offshore gambling operators will be required to lodge returns and pay offshore gambling duty on a quarterly basis in a manner that would align with their current GST returns. Returns for the offshore gambling duty must be filed on or before:
- 28 October for the return period ending on 30 September,
- 28 January for the return period ending 31 December,
- 7 May for the return period ending 31 March, and
- 28 July for the return period ending 30 June.
One point of particular interest in the commentary relating to the amendments introduced by the Act was the recognition given to the offshore sites associated with New Zealand’s casinos. It was stated expressly that these sites will be subject to the offshore gambling duty obligations, implicitly recognising the legality of those sites.
In the event that an offshore gambling operator has negative offshore gambling profits for a return period, this negative amount will be carried forward as an offset against offshore gambling profits in future return periods.
For further information relating to New Zealand laws that apply to offshore gambling operators, please contact a member of the Addisons Gambling Team or send an e-mail to [email protected].
1 Although the current rate of GST in New Zealand is 15%, the GST on gambling equates to approximately 13%, according to the ‘Commentary to Amendment Paper No 20’ of the Bill.