Some of the biggest US tech firms are now obligated to pay a new tax under Canada’s Digital Services Tax bill. The US government is pushing for a delay.
The Digital Services Tax (DST), a new tax bill proposed by the Canadian Liberal government in 2021 and enacted on June 20, 2024, has significant implications for U.S. tech firms operating in Canada. The bill, introduced as an interim measure with support from G20 countries, could potentially cost these firms billions of dollars in new taxes, prompting the U.S. government to intervene and advocate for a delay.
According to the Canadian government announcement, the Digital Services Tax will apply a 3% tax on revenue earned from online marketplaces, online advertising services, social media, and user data. Companies covered by this law must earn a minimum annual global revenue of €750 million, and at least CA$20 million of their revenue must come from Canadian users.
