News Media Bargaining Charge - What Big Tech needs to think about now

As part of the Australian Government’s broader policy to support the sustainability and diversity of the Australian news media sector in an increasingly digitised advertising market, exposure draft legislation has been released to introduce a News Media Bargaining Charge, also known as the News Media Bargaining Incentive (NMI).

Why this matters now

The proposed NMI is to be imposed on large digital platforms operating in the Australian market. For multinational technology groups with Australian users, this measure, if introduced in its current form, is a significant new impost and presents an ongoing compliance obligation.

What has changed

Under the exposure draft package, liability for the NMI charge arises at the parent entity level of a corporate group where:

• One or more members of its service group provide a significant social media service or search service in Australia; and
• The group’s consolidated revenue attributable to Australia exceeds AUD 250 million for that year.

A service is regarded as ‘significant’ by reference to its average monthly active Australian users in the financial year. The relevant threshold is the higher of:

• Five million users (or such other number as prescribed by the rules) for a social media service; or
• Ten million users (or such other number as prescribed by the rules) for a search service.

The charge is proposed to apply to financial years commencing on or after 1 January 2025 and is calculated by applying a 2.25 per cent rate to the group’s Australian consolidated revenue from the third most recent financial year.

Several aspects of the proposed regime are particularly important for multinational groups:

• Liability is assessed at a group level, with joint and several liability extending to controlled entities
• The legislation has extraterritorial application, extending to acts, omissions and arrangements outside Australia
• The NMI charge is not deductible for Australian income tax purposes; and
• A significant social media service or search service does not need to carry or display news content to attract the charge.

Crucially, the liability to an NMI charge may be offset, in part or in full, through qualifying commercial agreements with Australian news media businesses to produce news content or to use their news content. The non-refundable charge offset is calculated by applying an uplift rate to the group’s new eligible expenditure under such agreements. Unused eligible expenditure may be carried forward and used in subsequent years.

Two uplift rates apply:

• 170 per cent for expenditure relating to small or medium news media businesses (those with aggregated turnover less than AUD 50 million)
• 150 per cent for expenditure relating to all other news business entities.

Offsets are subject to a 25 per cent cap per news media business group, meaning that a liable parent entity must engage across a minimum of four separate news media business groups to fully offset its NMI exposure.

The structure of the offset reinforces the NMI's underlying policy objective: to drive behavioural change and encourage broader engagement with local Australian media content providers, rather than serving as a straightforward revenue-raising measure.

Treaty overlay: an emerging tension

Although the proposed NMI is to be assessed and imposed under a standalone Act rather than the income tax law, it is calculated by reference to revenue; it is not an income tax, yet it is to be administered by the Commissioner of Taxation and is expressly carved out of deductibility.

This raises an inevitable, and currently unresolved, question for multinational groups: how does this interact with Australia’s network of tax treaties? At present, the Government is silent on its position on this issue, leaving groups to assess this risk without formal guidance.

BDO’s perspective

For the technology sector, the practical complexity is less about the headline rate and more about execution: defining which services fall within scope, calculating Australian consolidated revenue using accounting standards, ensuring agreements meet the defined eligibility conditions (including counterparty constraints), and maintaining a diversified portfolio of agreements that can be practically used in the offset framework each year.

The measure is expected to attract considerable public and media attention. It remains to be seen whether it will be fully implemented as currently published in response to submissions.

The consultation on the draft legislation is now open until 18 May 2026.

How BDO can help

BDO’s corporate and international tax team works closely with multinational technology groups to assess the impact of new and emerging measures, support engagement with consultation processes, and design practical, compliant approaches aligned to broader global tax and regulatory obligations. If you would like to discuss how the proposed NMI may affect your group, our specialists are well placed to assist. Contact us today to find out how we can help.