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ARTICLE · 11 JULY 2024

Canada Finally Enacts The Digital Services Tax (Maybe)

Davies Ward Phillips & Vineberg LLP
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The new Digital Services Tax Act came into force with an order-in-council on June 28, 2024, imposing a 3% digital services tax on certain Canadian-source digital services revenue of large entities.

CanadaTax
Nathan Boidman
Nathan Boidman
Ian Caines
Ian Caines
Marc André Gaudreau Duval
Marc André Gaudreau Duval
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The new Digital Services Tax Act came into force with an order-in-council on June 28, 2024, imposing a 3% digital services tax (DST) on certain Canadian-source digital services revenue of large entities. The DST would first be payable in 2025, with the initial payments retroactively covering calendar years back to 2022. For further details regarding the DST see Davies' bulletins of 2021 and 2023.

The Canadian government first proposed a DST in 2020, following a model that had already been implemented by other countries such as the United Kingdom, France and India; but the government then suspended enactment subject to the implementation of the Organisation for Economic Co-operation and Development's Pillar One initiative by the of end of 2023. However, with Pillar One having failed to be implemented by that deadline, Canada is now proceeding with the DST.

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