High Court makes certain broadcasters subject to telecommunications development tax

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Tristan Gilbertson (Telecommunications Commissioner)

Credit: Supplied

The High Court clarified that it is not only telecommunications operators who are subject to the telecommunications development tax (TDL), but also broadcasters.

A court ruling at the end of last week clarified that companies involved in the transmission of broadcast signals should be required to contribute to TDL.

The Commerce Commission sought clarification from the High Court after changes to the Telecommunications Act in 2018 removed an exemption for “broadcast” from the definition of “telecommunications”. The other parties involved in the case were Kordia, Sky TV, TVNZ, Optus and Chorus, as an intervener.

Telecommunications Commissioner Tristan Gilbertson said the commission was to determine the amount of TDL paid by industry participants under a statutory framework in law by December of each year and welcomed the clarity provided by judgment.

“It was important for us to be able to decide on the liability of TDL with a clear view of the liability of one of the broadcasters following the changes to the telecommunications law,” he said.

The judgment confirmed that with the exception of free-to-air broadcasters and satellite providers operating outside New Zealand, companies involved in the broadcast transmission may be required to pay TDL.

TDL was created by law in 2011 and clarified that the amount telecom providers must contribute would be reduced from $ 50 million to $ 10 million per year in 2020.

“The judgment will not change the total funds collected by the levy, which is set at $ 10 million per year, but it will affect the contributions made by individual businesses, which are proportional to their income from telecommunications services,” Gilbertson said. noted.

“We will now use the advice provided by the High Court to move forward and make our decision on the TDL for 2021/22.”

Last year Spark, Vodafone, Chorus and 2degrees collectively paid around 90% of the royalty.

The tax is paid by businesses that earn more than $ 10 million per year from telecommunications services. It is used to pay for infrastructure and telecommunications services that are not commercially viable, including relay service for the deaf and hard of hearing, broadband for rural areas, and improved emergency service 111.

The levy has been set at $ 10 million for the year 2019/20 and is adjusted for inflation for the following years



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Tags VodafoneTelecommunicationsKordia2degreesCommerce Commissionspark


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