Do you know what is Canada's digital service tax (DST)?
DO YOU KNOW WHAT IS CANADA’S DIGITAL SERVICE TAX (DST)?
Monday, June 30, 2025
Taken from CBC. Written by Rhianna Schmunk
What is the digital services tax? Canada's digital services tax (DST) was set to affect mega companies that offer digital services, like online advertising or shopping, and earn more than $20 million in revenue from Canadian sources. Giant companies like Amazon, Apple, Airbnb, Google, Meta and Uber would be taxed 3% on the money they make from Canadian users and customers.
The levy has been in place since last year, but the first payments were due starting today (Monday). Since it was retroactive to 2022, U.S. companies were looking at a $2-billion USD tax bill.
The Liberals first promised the tax during the federal election in 2019 under former prime minister Justin Trudeau, but it was delayed for years because a number of other nations wanted to work together on one, overarching digital taxation plan that could be applied in multiple countries.
As the delays dragged on, Canada went ahead with its own tax plan.
Aside from revenue, Ottawa has pitched the DST as a way to bring the tax code up to date and capture revenues earned in Canada by firms located abroad.
The U.S. has been hostile to the tax from the beginning because it largely affects U.S. tech giants. A number of industry experts have warned for years that the tax would strain the relationship between Canada and the U.S.
France, Italy, Spain and the United Kingdom all have similar tax regimes in place, to name a few.
Text taken from CBC, Monday, June 30, 2025
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