Liberals to proceed with digital services tax on tech giants

Going ahead with a unilateral tax could risk further worsening the trade relationship between Canada and the United States

The Liberal government intends to proceed with plans to implement a digital services tax targeting tech giants, potentially within the coming weeks.

A spokesperson for Finance Minister Chrystia Freeland confirmed the government will “move ahead with legislation finalizing the enactment of a Digital Services Tax.” A government source said the release of draft legislation or some type of consultation is a probable next step, and will likely come before the end of the year.

The Liberals promised the tax in the 2021 budget, saying it would bring in $3.4 billion over five years. It’s aimed at large companies that operate online marketplaces, social media platforms and earn revenue from online advertising — the likes of Amazon, Google and Facebook, as well as Uber and Airbnb.

But then in October, the Organization for Economic Co-operation and Development reached a deal on a multilateral tax approach for a global minimum corporate tax rate of 15 per cent. The largest and most profitable global companies will have to pay some taxes in countries where they operate, even if they’re not physically present in the country...

This was excerpted from the 29 November 2021 edition of the National Post.