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ARTICLE · 31 JULY 2023

Important Proposed Tax Changes For Digital Service Providers In 2024

The Government of Canada is taking notable strides towards transforming the taxation landscape for the digital economy.

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The Government of Canada is taking notable strides towards transforming the taxation landscape for the digital economy. After implementing new GST/HST rules in 2021, the Government of Canada proposed two new key changes: the introduction of a digital services tax through a new act and the implementation of new reporting obligations for digital platform operators via amendments to the Income Tax Act.

Canada's current proposed Digital Services Tax Act (DSTA)

Recently, the Government of Canada reaffirmed its commitment to implementing a Digital Services Tax (DST) in 2024 if pillar one of the OECD's two-pillar plan has not come into force by the end of 2023.

If enacted as proposed, the DST will apply at a rate of 3% on revenue earned by large business from certain digital services reliant on the engagement, data and content contributions of Canadian users. The DST will be applicable on a calendar year basis, beginning with the year that includes the day that the

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