GAFA tax: Ottawa continues the cycle in January 2022

Ottawa will not wait for the end of the Organization for Economic Cooperation and Development (OECD) work and wants to impose taxes from January 2022 on all foreign giants providing digital services in the country, hoping to raise $ 3.4 billion over the years. The next five years.

If this measure is achieved in the coming months, Canada will follow the example of France, which has imposed, since 2019, a 3% tax on the revenues of companies providing digital services whose turnover exceeds 750 million euros (1.1 billion Canadian dollars). .

It is a similar formula that will be imposed on Canadian soil. The tax will be applied “to revenue from data-driven digital services and content contributions from Canadian users.”

“The government is committed to ensuring that companies in all sectors, including digital companies, pay their fair share of the money they earn from doing business in Canada,” the report read. Finance Minister Chrystia Freeland’s budget, released Monday.

Last fall, Ottawa renewed in its economic statement its desire to impose a tax on companies that provide digital services, such as Amazon, Facebook, Google and Apple, while the epidemic has prompted the use of certain platforms.

Consequently, Ottawa wants to ensure that the tax on goods and services is applied “in a fair and efficient manner to the digital economy.”

By the summer?

The Trudeau government, which has pledged to tax the web giants in 2019, is taking this step despite the fact that “work is underway to reach a multilateral agreement on cross-border digital taxation by mid-July 2021”.

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Ottawa, which is “optimistic about the progress that has been made this year,” says it will enforce the measure until consensus is reached by the OECD. Remember, these discussions have been going on since 2013.

This new tax must be applied “from January 1, 2022, until it is replaced by an acceptable multilateral approach”. The federal government provides in its budget, which is still hoping for a broad agreement between many countries starting this summer.

In addition to France, several other European countries, such as Italy and the United Kingdom, levy a tax on digital giants.

Remember, since 2019, Quebec has required foreign digital service providers to collect Quebec sales tax.

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